Portugal and Brazil: role reversal

The EU finds Portugal troubling: no government, high resistance to austerity and chronic economic underperformance (gross domestic product has stagnated for a decade). Negotiations are tough.

Here is an out-of-the-box way to deal with the situation: annexation by Portuguese-speaking Brazil (a decade of 4 per cent annual GDP growth, much higher recently). Portugal would be a big province, but far from dominant: 5 per cent of the population and 10 per cent of GDP.

Sure, the old colonist would resent the loss of status. But the former colony has something to offer, even beyond narrower credit spreads and proportionally much lower government and current account deficits. Brazil is one of the Brics, the emerging centre of world power. That sounds like a better home than the tired old EU.

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