Just six years after Portugal's 2011 financial bailout sparked protests and sent the country's young people abroad in search of work, the country is experiencing an economic revival.
Mario Mouraz was one of those who left Portugal looking for work. Now, after three years abroad, he's back, selling his own software to Lisbon hotels in the middle of a tourist boom.
Mouraz, 28, is the co-founder and CEO of Climber Hotel, a tech startup that helps hotels maximize occupancy. He and his company are part of two new trends — fresh entrepreneurship and an uptick in tourism — that have fueled Portugal's economic recovery.
"My friends, people I know, who were leaving the country more or less at the same time I did, in 2011 and 2012, a lot of them came back already or want to come back," Mouraz says. "They come full of motivation, with knowledge from other countries and a different mindset."
They are also finding jobs. Wages are up, and Portugal's unemployment rate has dropped to around 10 percent from a high of nearly 18 percent in 2013.
Portugal's economy has rebounded dramatically since its $83 billion European Union bailout in 2011. What's surprising is that this has happened without austerity measures — the spending cuts and tax hikes that Portugal's creditors, the EU and International Monetary Fund, said were the only way to survive Europe's debt crisis.
Such measures were initially imposed by Portugal's then center-right government, on orders from the EU and IMF. But when a left-wing, Socialist-led coalition took power in November 2015 and began canceling austerity — raising wages and lowering taxes — many economists warned Portugal would need a second bailout.
But that has not happened. Instead, the economy has posted 13 consecutive quarters of growth — beginning under the previous government, and surging during the current one. Its budget deficit has hit a 40-year record low of 2.1 percent of GDP, the first time Portugal's deficit has dropped below EU limits.
Ana Santana, 31, a police officer in Loures, north of Lisbon, whose salary and benefits were cut under austerity, is celebrating the changes. Under the Socialist-led government, her Christmas bonus has been restored, as have four extra paid public holidays for civil servants.
Santana's husband, João Tavares, 29, is a youth basketball coach who, for years, has been on a precarious, temporary contract with the Lisbon municipality.
"I have confidence and real hope that my contract will become permanent any day now. It's one of the promises made by the Socialist government, when they took office," Tavares says. "With local elections coming later this year, I think they'll regularize our contracts soon."
Leftists across Europe are applauding Portugal's recovery as proof that austerity is not the only way out of economic distress.
"Europe chose the line of austerity and had much worse results," Economy Minister Manuel Caldeira Cabral told NPR in an interview. "Economic growth was much slower, and the reduction of unemployment took much longer than in the U.S. What we are showing is that with a policy that restitutes income to the people in a moderate way, people get more confidence and investment returns."
Some Portuguese economists remain skeptical. They say the left-wing government simply lucked out by being in office at a time when the country is seeing double-digit growth in tourism.
"They are surfing the wave, which is good! So far, so good," says Lisbon-based economist João Duque. "But things may get worse in the medium and long term. We have several weaknesses, and they are not treating them."
Aside from tourism, Portugal doesn't export much besides vehicle parts, leather shoes and port wine. Public debt remains high. Most ratings agencies still classify Portuguese bonds as junk.
But for Santana, the police officer, and her husband, life is good. They have moved into a larger apartment. With more job security, they're thinking about having a second child.
"Our quality of life has no doubt improved," Santana says. "I just hope this isn't a bubble."
STEVE INSKEEP, HOST:
Now we have the results of a test of economic policy. Europe has spent years recovering from the financial crisis, and some nations adopted austerity programs. But a year and a half ago, a socialist government in Portugal said the heck with, canceling austerity. And now the economy is growing. Lauren Frayer reports from Lisbon.
(SOUNDBITE OF ARCHIVED RECORDING)
UNIDENTIFIED PROTESTERS: (Chanting in Portuguese).
LAUREN FRAYER, BYLINE: That's what Portugal used to sound like after its 2011 bailout. Thousands of people took to the streets to protest austerity. Unemployment was nearing 20 percent. And Mario Mouraz, like so many Portuguese youth, went abroad in search of work.
MARIO MOURAZ: We have three main models that give an overview of what...
FRAYER: But today he's back, in the glistening lobby of a posh Lisbon hotel, selling software to the hotel manager in the middle of a tourist boom. Mouraz is part of two new trends, fresh entrepreneurship and an uptick in tourism, that have fueled Portugal's economic recovery.
MOURAZ: My friends and people I know that were leaving the country more or less at same time I did - in 2011, 2012 - a lot of them came back already or want to come back. So they come full of motivation with knowledge from other countries.
FRAYER: And they're finding jobs. Unemployment has sunk to around 10 percent.
FRAYER: At home north of Lisbon, Ana Santana's playing with her toddler. Santana is a police officer whose salary and benefits were cut under austerity. But after a left-wing socialist coalition took power in late 2015...
ANA SANTANA: (Speaking Portuguese).
FRAYER: "We got our Christmas bonuses back," she says. The government also restored four paid public holidays for civil servants.
JOAO TAVARES: (Speaking Portuguese).
FRAYER: Her husband, Joao Tavares, says he expects his temporary contract with the municipality to be made permanent any day now, another promise by the socialists. Leftists across Europe are applauding Portugal as vindication that austerity was not the only way. Under the socialists, Portugal's budget deficit has hit a 40-year low and wages are up.
MINISTER OF THE ECONOMY MANUEL CABRAL: Europe choose the line of austerity and had much worse results.
FRAYER: Economy minister Manuel Cabral says austerity slowed growth and job creation in Europe.
CABRAL: What we are showing is that with a policy that restricts income to the people in the moderate way, people get more confidence, and the investment returns.
FRAYER: Some economists are skeptical, though. Finance Professor Joao Duque says the government simply lucked out by being in office during double-digit growth in tourism.
JOAO DUQUE: So yeah, they are surfing the wave - which is good. OK. So far, so good. But things may get worse a bit more in the medium and long term. We have several weaknesses, several weaknesses.
FRAYER: Portugal doesn't export much - leather shoes, port wine. Public debt is still high, and most ratings agencies still classify Portuguese bonds as junk. Meanwhile, the police officer Ana Santana and her husband have moved into a larger apartment. With more job security, they're thinking about a second child.
SANTANA: (Speaking Portuguese).
FRAYER: Their quality of life has definitely improved, Santana says. But she hopes this isn't a bubble.
For NPR News, I'm Lauren Frayer in Lisbon.
(SOUNDBITE OF MENISCUS' "OVERHANG") Transcript provided by NPR, Copyright NPR.