A Long International Monetary Fund Intervention : Portugal 1975-1979

Most of the literature on the interventions of the International Monetary Fund (IMF) in Portugal points to the June 1978 Stand-by arrangement (SBA) between the Portuguese authorities and the IMF as being the first such intervention (Nunes, 2010, Lopes, 1982 and 1996, Pinto, 1983, Schmitt, 1981, or Mateus, 2013). However, our research has unearthed facts that challenge such interpretation. The reasons are many. First, Portugal started using IMF resources since July 1975 and following policies to control the external deficit that were concordant with IMF principles and techniques since December of the same year. Second, Portugal signed an SBA in April 1977, one year before the 1978 one. And third, Portugal did not comply with the performance criteria of the 1978 SBA, which supposedly defined the first “intervention” and, consequently, did not receive any financial assistance from the IMF for its duration: June 1978 to May 1979. Zorrinho (2018) is a recent exception to the common interpretation, suggesting that, rather than a one-year intervention in 1978-1979 and a three-year one in 1983-1985, relations between Portugal and the IMF in order to restore external balance during the period 1975-1985 corresponded to a sort of decade-long IMF intervention, involving three SBAs and various other utilisations of IMF resources on the part of Portugal. We do agree with Zorrinho (2018) that the chronology of the first intervention should be enlarged but not with his proposed chronology, as we believe that the use of IMF resources was interrupted between 1978 and 1983 and that the third SBA signed with the IMF in October 1983 should be viewed in a different framework