A month or so back I answered
a question about buying property in Lisbon. Here is an update that
might help concentrate the mind on this question.
13% of the Portuguese work force is on the minimum wage, which is €485
a month, or about £95 a week. The number of people out of work in
the country is hovering around 17%, with the highest unemployment in
Lisbon itself, at 18.5%. Looking towards the future, no less than 40%
of the under twenty-fives are out of work.
The only future for Portugal at the moment, and there is no change in
sight, is for a worsening of those figures, with the country gradually
getting poorer and poorer. The alternative is for a drastic reduction
in the population, which will have a serious effect on house prices.
My own view is that the population of Portugal needs to shrink by 25%
rather quickly in order for the standard of living to rise. Luckily,
the country's birth rate is down, and that goal may well be achieved
over the course of the next fifty years.
With the increase in the speed of automation, the increase in the
erosion of jobs by machines, and the rise of robots in industry, and
even the service sector, the job market is going to contract
considerably over the next fifty years.
Agriculture has lost 80% of its workers over the last hundred years.
Industry is losing jobs at an alarming rate due to automation, and the
service industries will be next. The only growth area in jobs is the
high end technical, and, because of Portugal's low grade educational
system, those jobs will not be coming to Portugal in any significant
Investing in Portugal is investing in a contracting market. Let's be
sensible here. How on earth can a country expand when 40% of younger
working age people are out of work, and automation is increasing apace?
Going forward, that figure has to worsen. At what point does the
support system cave in? Heck, it's caved in already. The country cannot
survive alone. Tax receipts nowhere near cover annual expenditure so
the country has to borrow by issuing bonds, money it can never hope to
pay back. Not only that, but they cant even survive with all those
loans, they still have to borrow from the ECB. Economically apeaking,
Portugal is a black hole that sucks in money it can never repay. The
country is effectively mortgaged to Germany. Portugal is going back to
being a country of serfs.
I dont know about you, but I dont want to buy into that scenario.
As regards business, I did point out that the government is rather good
at raiding bank accounts or blocking them without recourse to law. Let
me update you on that little wheeze as well.
I quote from the Algarve Daily News (algarvedailynews.com
"With the new Civil Procedure Code
coming into force last September claims against debtors have become
swift and easy to execute with no need for the debtor actually to have
his case looked at by a judge, and no opportunity for the alleged
debtor to argue his case.
"Since September 2013, 51,811 bank accounts have been raided with an
estimate that by the end of 2014, €250 million could have been taken
from bank accounts.
"This cross-checking of personal information has enabled the
substantial increase in the number of seizures which totals €773,000
for every working day."
When judging where to do business I keep emphasising that the most
important metric to check is whether the government of a certain
country is your friend or your enemy. In Portugal, if you are in
business, the government is your enemy. Do business here at your peril.