What is Portugal’s economic system? More free market, capitalistic, socialist, etc.?
Luis Teixeira da Silva - Algarve Senior Living
Generally speaking, Portugal has a free market and fairly capitalistic system but still with a very strong role of the state in terms of its social responsibility. As a result, you will still see a government that attempts to protect within the financial limits imposed by budgets and other things. You will still see a government attempting to protect the poorest relative to their salaries, the elderly, etc., and although those protected mechanisms have drastically reduced and...Generally speaking, Portugal has a free market and fairly capitalistic system but still with a very strong role of the state in terms of its social responsibility. As a result, you will still see a government that attempts to protect within the financial limits imposed by budgets and other things. You will still see a government attempting to protect the poorest relative to their salaries, the elderly, etc., and although those protected mechanisms have drastically reduced and fallen away over the years because of certain measures. Nonetheless, compared to the US, for example, the state here in Portugal intervenes a lot. A good example is that before the change of government, which happened just recently, the national airline, TAP was privatized and 51% of it was sold to a consortium headed by an American investor, but at the moment, the socialist government is trying to reverse that situation by renegotiating the shareholding of the external investor from the majority to the minority position. I think this is something that in the US would be unheard of or the state would not be looking to buy the shares back from any of the airlines because there isn’t really a national airline in the US. If there were one, it would be difficult to imagine the US government buying back shares in an airline to ensure some kind of say in its management or protection of the nation as a whole.
(1968 TAP airline commercial in lights behind the fountain in Rossio Square, Lisbon, Portugal, pictured.)
Posted January 15, 2016