ABSTRACT
This chapter discusses that the financialisation process of the Southern European periphery, fostered by the Economic and Monetary Union, is crucial in explaining the European Union focus on internal devaluation as a preferred policy instrument for economic adjustment. This conjecture is presented against a theoretical background in which the link between labour restructuring in these countries and financialisation is either ignored or downplayed. The financialisation literature on labour relations is often focused on the short-term behaviour of listed corporations towards their workforce in a new context of myopic shareholder value, narrowing its research to listed companies and to countries with sizeable stock exchange markets. The chapter scrutinises the rise of internal devaluation as a policy priority in the context of the euro crisis. It deals empirically with the consequences of internal devaluation in Portugal during the adjustment and recovery periods, pointing to the structural changes taking place within the Portuguese economy.
