PORTUGALfiscal crisis in

A major policy failure.

Government cannot

finance its regular

activities and functions…

Portugal, before the Crisis

GDP

Unemployment

The

Effects

GDP

decline

-5.3%

15.9

Rising

unemployment

%

Escalating national

debtOver

110%

(of GDP)

CausesCrisis?

of

Rising Bond Yields

Bond Yields

Bond Prices

Panicselling

Austerity

Fiscal tightening&

Current

Account

Deficit

Problems with CAD

Decline in competitiveness

Financing the CAD

Deflation in Europe(and therefore in Portugal)

If Portugal wereoutside the Euro,

would it have been

DIFFERENT ?yes.

Portugal’s

FUTURE

(and our suggestions)

Thank

you!