The Actual State of the Nation

Written By Manuel Poças

The first State of the Nation debate in Portugal took place 30 years ago and the concept was, to a large extent, inspired by the United States’ “State of the Union” address. 

This political debate takes place every legislative session, at the Portuguese Assembly of the Republic. This year’s State of the Nation was the second debate of the current legislature. Note that each legislature has four legislative sessions, corresponding to the four-year electoral cycle.

The form of the debate is the following: the Prime Minister opens the debate with an intervention about the current state of the nation; the parliamentary groups, or political parties, ask some questions; a generalized debate takes place; the Government (Prime Minister and Ministers) closes the debate.

According to this year’s balance, things seem to be improving.

Immigration has been increasing since 2015. The economy is currently one of the fastest-growing economies in Europe. The poverty rate dropped, and inflation is dropping. There is more employment, more qualified people, and bigger pensions. Banks are generating more profit. The state is reviewing part of the education portfolio and is allocating more money to culture.

However, not everything is as good as it seems.

The standard of living of the average Portuguese citizen is among the lowest in the EU. Around 1.7 million people live with less than 551 euros per month, and 16,4% are at-risk of poverty. Even though salaries increased, real income has decreased. This is the amount of money an individual, or an entity makes after adjusting for inflation.

Because of inflation, Portuguese citizens have 3.5% less purchasing power. In the meantime, the price of food products surged.

Moreover, the housing market grew 94% in seven years and houses are now among the most expensive in Europe (i.e. Lisbon’s price per square meter is currently above 5000 euros, more expensive than in Milan, Barcelona, and Madrid).

Meanwhile, the average net monthly salary in Portugal is one of the lowest in the EU (1,025 euros), and the tax rate is one of the highest (i.e. 54% for the top personal income tax rate). To add to that, interest rates for most mortgages increased because of Euribor.

Education and culture are key. Ongoing education strikes suggest that education workers are unhappy. There are fewer and fewer people wanting to work in education. The public perception of that kind of work is distorted. That is reflected in the minimum GPA required (2.5/5) to get into higher studies in education. Younger generations are being affected by this. They have less classes and less qualified teachers.

Employment has been increasing because of non-qualified workers. Qualified people leave. The number of Portuguese emigrants in 2023 is above two million. People are not particularly happy (world happiness report, score of 6/10). There are more individuals, less quality of life, less money, expensive houses, expensive food, high credits, and high taxes.

Both banks and the state are improving the accounts at the expense of Portuguese citizens. They are the ones that pay the interest rates, the high taxes, and the fines with their already low income.

Those looking for a better life, emigrate. Data shows that in 2022, around 7% of the Portuguese population did that. There are more people wanting to leave the country, than those wanting to come back. Why? Because of the current state of the nation.

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