In Portugal, social support has not kept pace with rising prices; and Brussels speaks of “a critical situation” in the Portuguese social protection system.
The European Commission considers that the effectiveness of Social Security in Portugal in attenuating the poverty and the inequalities income deteriorated.
Brussels speaks in a “critical situation”due to the fact that social support has not kept up with the increase in prices.
“The effectiveness of the Portuguese social protection system in mitigating poverty risks and reducing income inequalities has deteriorated. In 2023, the impact of social transfers – with the exception of pensions – on poverty reduction decreased by 3.9 percentage points, standing at 19.8% against 34.7% in the European Union, which indicates a ‘critical situation’ ”, says the community executive.
In a report on employment in the European Union (EU), which is part of the second part of the autumn package of the European Semester and released this Tuesday, the institution justifies that “the decrease in the effectiveness of social benefits reflects the fact that, while prices and nominal wages have grown rapidly in recent years, social benefits did not increase at the same rate”.
Inequalities have increased
Furthermore, according to Brussels, inequalities also deteriorated in 2023, while the percentage of people at risk of poverty or social exclusion remained stable in that year and is within the average, being “particularly high in the outermost regions of the Azores and Madeira” .
Controlled unemployment
With regard to employment, the European Commission argues in this report that “the Portuguese labor market continues to be resilient”.
“In a context of economic growth above the EU average, the employment rate improved from 77.1% in 2022 to 78.0% in 2023, supported by net migration”, highlights the institution.
Even so, Brussels warns that the unemployment rate in Portugal increased slightly (0.3 percentage points) in 2023, to 6.5%, and that “the segmentation of the labor market persists, reflected in the high percentages of young people on temporary contracts ”, which was 42.9% last year, compared to 34.3% in the EU.
What is certain is that, despite the warnings, “Portugal does not appear to face potential risks for upward social convergence”, assures the institution in the report.
In the EU as a whole, the employment rate reached an all-time high of 75.3% in 2023 and increased again to 75.8% in the second quarter of 2024.
The goal is to reach 78%as stipulated in the Action Plan on the European Pillar of Social Rights, approved at the Porto Social Summit in May 2021.
At the same time, last year the unemployment rate in the EU fell to a historic low of 6.1% in 2023, a trend that has continued into this year 2024.
