These days, one of the large problems in Europe is Portugal. The poorest country in Western Europe is on the brink of an international bailout, which would be the third in the euro zone after Greece and Ireland.
To this, adds the fact that Portugal’s Prime Minister José Socrates resigned on Wednesday after the parliament rejected his plan for spending cuts and tax increases.
Supposedly, Portugal is going to run out of money this year and will need an international bailout. Portugal’s main problem has been huge amounts of debt that the country could no longer hold. This year, the government debt will reach 90% of the GDP.
One of the most important problem in Portugal is the human capital. It is the least educated country in Western Europe, with just 28% of its population (25 to 64 years) with a high school degree. There is a 37.1% high school drop-out, which is way higher than the average 20% and Germany’s 2.8%. This has emerged as a huge problem in Portugal now. As Portugal has large debts that it needs to pay off with long-term growth, an unskilled work force makes this very hard.
The issue about education is not one that can be solved quickly. The cuts that come in relation with a bailout and that are necessary for the recovery only make this task harder. It is, however, on the top of the list of the reforms needed to fix the economy and Mr. Sócrates made it clear that investing in education was a priority for the country.
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