Currency depreciation increased the debt selleck compound burden because debt was expressed in foreign currencies and had to be paid with the national depreciated currency, a genuine original sin (as Flandreau and Sussman [59] argue). This partial Portuguese bankruptcy in 1892 consisted of a forced decrease of public debt interest to 1% and a suspension of amortization. It was declared by a government decree on the 13th of June 1892, in the wake of the Baring crisis. The Baring Brothers bank, a traditional lender to the Portuguese government, was suffering from the Argentina and London crisis, which historians attribute to intensified competition among leaders [58]. Short-run loans from abroad, usually received as floating debt, were no longer available because of the South American crisis.
This was coupled with a currency ��mismatch,�� a twin crisis, which explains why the payment of interest and amortization could not be achieved. Mitchener and Weidenmier [60] document 46 debt defaults by 25 different countries out of roughly 40 to 50 sovereign countries between 1870 and 1913, while Suter [61] counts 72 default episodes between 1820 and 1913, indicating that situations of this kind were widespread, particularly among capital-poor countries throughout the nineteenth century. Soaring public expenditures and public debt in the nineteenth century are the other face of the rising globalization.
Looking for conclusions for the twentieth century, the large cluster of the 1950s to 1973 in Figure 3 describes the most successful period of modern economic growth in Portugal, which was based on budget equilibrium and large exports to the colonial empire in the 1950s, or on small (and disguised) public deficits to support the colonial war, and large exportation to EFTA in the 1960s [18]. According to Smith [62], the establishment of people in the third colonial empire (in Africa), coupled with industrialization, allowed Salazar to balance the budget throughout the four decades of his government and to pay down the public debt that had accumulated from the Fontismo days to the moment before he came to power, and it accounts for the first phase of significant economic growth in Portugal.Quite apart is the revolutionary period of 1975�C1977 in Figures 4(a), 4(c), and 13(a). This period is related to the difficult context of the first oil shock,the 25th April military revolution of Carnations, and decolonization.
An increased population (thanks to the half-a-million return flow of people from the empire) and implementation of democracy led to the need for support in the form of the first International Monetary Fund (IMF) loan. According to Figure 3(a), the 1981�C1983 crisis Carfilzomib is also quite special, and the need for the second IMF support is usually related to the second oil shock and to political hesitations in designing an economic blueprint for Portugal, after a large communist influence on governance and collective life following the Carnation revolution.