The New York Times

Portugal Dared to Cast Aside Austerity. It Is Having a Major Revival.

This article originally appeared in The New York Times.

LISBON, Portugal — Ramón Rivera had barely gotten his olive oil business started in the sun-swept Alentejo region of Portugal when Europe’s debt crisis struck. The economy crumbled, wages were cut, and unemployment doubled. The government in Lisbon had to accept a humiliating international bailout.

But as the misery deepened, Portugal took a daring stand: In 2015, it cast aside the austerity measures its European creditors had imposed, igniting a virtuous cycle that put its economy back on a path to growth. The country reversed cuts to wages, pensions and social security, and offered incentives to businesses.

The government’s turnaround, and willingness to spend, had a powerful effect. Creditors railed against the move, but the gloom that had gripped the nation began to lift. Business confidence rebounded. Production

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