Cutting pay helps Portugal's economy

Since the beginning of Portugal's adjustment programme prescribed by the troika incomes have gone down by an average of 30 percent owing to cuts in social benefits and changes to labour laws. Nonetheless the ECB is right to expect further measures aimed at lowering labour costs, the liberal business daily Jornal de Negócios writes: "The ECB has proposed a range of interesting measures for crisis-stricken countries. One measure in particular is being given special consideration: lowering salaries and income as a means of reducing company production costs and making exports cheaper. This measure is already being implemented in Portugal (average net wages have gone down by 107 euros in the last two years) and will soon affect Spain and Italy. ... It is the most controversial and drastic measure, but not the only one that should deserves attention. …. Salary cuts are a stopgap measure, but are necessary to save jobs. Saving companies in a country with an unemployment rate of 16 percent is a worthy cause, even if it's at the expense of the workers. Or isn't it?"

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