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2026-05-26 21:57:26
[Prime Minister Says Portugal Must Reform Labor Laws to Unleash Growth, Target Raised from 2% to 4%] ⑴ The Portuguese Prime Minister stated on Tuesday that labor laws must be relaxed to enhance competitiveness and attract more investment, hoping to push for comprehensive labor reforms to be approved by parliament in the coming weeks, despite opposition from unions to key measures. ⑵ Reforms include easing outsourcing restrictions and introducing time banking arrangements to cope with peak demand, allowing employees to accumulate working hours and receive paid leave or wage premiums as compensation. Portugal ranks 38th out of 39 OECD countries in terms of labor law rigidity. ⑶ The Prime Minister stated that he does not want to deprive workers of their rights, but Portugal possesses all the conditions to become a benchmark for stability and attracting more investment during the current period of external instability. Relaxing labor laws could accelerate investment and boost annual economic growth from the recent 1.5% to 2% to 3.5% to 4%. ⑷ Foreign direct investment in Portugal is projected to decline by 34% to €8.5 billion by 2025, mainly due to a €1.2 billion reduction in intra-group debt between resident subsidiaries and non-resident parent companies. However, export-oriented investment promotion agencies received a record €3.5 billion in investment last year, eight times that of 2024. (5) The Prime Minister said the government could fine-tune the proposal, but a competitive economy cannot restrict outsourcing or abandon time banking arrangements.
