Main causes of the disappointing economic performance

4. Main causes of the disappointing economic performance
Government effectiveness indicator (2009).CountryScore (−2.5 to 2.5)France1.44Germany1.48Greece0.61Portugal1.21Spain0.94United States1.39Source: World Bank.Full-size tableTable optionsView in workspaceDownload as CSV
4.1. Moral hazard – living beyond its means
Portugal\'s membership in the EU and the Euro area provided its policymakers and politicians the illusion that it Dorsomorphin was possible to reach consumption levels of its richer partners prior to reaching productivity levels which were equivalent to that of its partners. The moral hazard was present on both the borrower and lender sides. The borrowers saw access to cheap credit with no devaluation risk, while the lenders saw no danger of losses due to devaluation or default.
The moral hazard behavior can be observed in Table 9. As already noted previously, the public deficit was above the required 3% of GDP in the entire period we are examining (its yearly average was 4.7% in the 1996–2000 period, rising to a yearly average of 5% in the 2001–2009 period, and reaching 8.6% in 2009).