ABSTRACT
Portugal’s entry into the European Community (EC) seems to be politically inevitable after the country has satisfied the political conditions set forth by the Community. This chapter shows that the economic implications can be rather subtle and complex. The adoptation of the EC’s systems of price support and input subsidies might help improve the allocation of resources within this sector. The chapter considers the economic policy implications of what has been said so far. Most people would agree that wider markets facilitate the exploitation of economies of scale in given firms, that they open opportunities for introducing large-scale production in newly established plants, and that they permit increased specialization, both vertically and horizontally, on an optimum scale. The chapter deals with a platitude which, however, underlines an important point: the Portuguese Government is facing the very difficult task to restore private business confidence in the country’s future economic development.
