Portugal

FOOTBALL IN PORTUGAL Football is Portugal’smost important sport. As such, it even takes a surprisingly large place on the political scene. Portuguese teams didn’t perform very well at the international level between 1986 and 2000. However, the country was thrown into the limelight again, when it reached the semi-final of the European Championship 2000. Furthermore, Portugal has been chosen to host the European Championship in 2004. In the 2002 World Cup, we expect the country will make it at least to the quarterfinals, as the drawseems quite favourable, with Poland the most likely to cause trouble (the others are South Korea, and USA), and the second round is unlikely to be very difficult, unless they are drawn against Italy who are likely to go through from group G. THE STATE OF THE ECONOMY 1986 was a good year for Portugal, it qualified for both the World Cup and EU membership. This was after nearly a decade of unsustainable current account deficits, high inflation and interest rates and a continuing depreciation of the exchange rate. Entry in the EU supported productivity and GDP per capita shot up from 54.4% of the EU average in 1986 to just above 75% in 1999. However, in recent years, real convergence has nearly stalled and imbalances have reappeared. In particular, the current account deficit increased sharply over the past couple of years to just above 10% of GDP in 2000, as the sharp increase in domestic demand outstripped supply. Over the last year, as the slowdown hit the economy, the imbalances have partly subsided. In this context, a good run in the World Cup may help to boost consumer confidence. Still, the main challenge ahead will be to increase productivity growthwhile keeping public finances under control, in order to prevent the economy from overheating once the recovery kicks in. THE STATE OF THE NATION Recent elections have resulted in a shift from the SocialistParty (center-left) to a coalition of the Social Democrat and Popular parties (right-wing). The campaign started with discussions about the economic situation of the country, in particular, the state of the public finances. However, football quickly claimed its place in the attention of the politicians, with a clash between the president of the OportoFootball Club and the Mayor of Porto over the construction of a new stadium, without which the European 2004 Championship in 2004 might not have been awarded to Portugal. Fortunately, by the end of the campaign the problem was nearly solved, thanks to the efforts of the Parties and of the President of the Republic. THE 2002 WORLD CUP Portugal has reason to be in a good mood this year. Despite difficult times ahead on the economic front, on the football front the outlook is good. The Portuguese “golden team” – ranked 5th by FIFA - includes big names such as Luis Figo, the European Footballer of the Year in 2000, and Rui Costa.Together with a number of very good young players, the team is bound to go far in this year’s World Cup. Previous Appearances: 2 1966 and 1986 Honours Semifinalists: 1966 (3rd)