What Austerity Looks Like in Lisbon

The once-bustling capital is now floundering.

Most countries wouldn't celebrate a 1.1 percent GDP increase. But for Portugal, where the economy hasn't expanded since 2010, even modest growth is a good sign. In the second quarter, the country's GDP grew and its unemployment rate declined for the first time in two years, dropping from 17.7 to 16.4 percent.

It has been a particularly rough few years for Western Europe's poorest country. Portugal has undergone a series of austerity measures in order to meet the European Union's bailout requirements. While the country has mostly been compliant with a string of new measures, its constitutional court struck down the latest one, a proposal form the center-right government that would have made it easier to fire civil servants, a famously bloated sector of Portugal's economy. It is the third austerity plan blocked by the court in a little more than one year.

A major reform it did agree to was the abolition of its pro-tenant rent control laws, ones that often included lifelong contracts, passed from generation to generation, increasing only with inflation. The government hopes that now, landlords will be able to charge rents that match actual property values, evict tenants that don't pay, and put new revenue towards overdue property upkeep.

However, the reforms also mean that as many as 250,000 families could face major price reviews. Meanwhile, many stores will likely be unable to keep up with market-based rents, creating a slew of vacant storefronts around the country.

It's a dramatic shift from the days of ambitious public investments in the 1990s and early 2000s, where its capital of Lisbon alone saw impressive infrastructure improvements, including subway expansions, the opening of Europe's longest bridge, a dramatically redeveloped waterfront for the 1998 World Exposition, and new stadiums for the 2004 Euro Cup

Reuters photographers, Rafael Marchante and Jose Manuel Ribeiro give us the more somber picture of everyday life today in Lisbon, one clearly defined by its rich history and culture but also burdened by the nation's balance sheets:

A man reads a newspaper at the Cais das Colunas, as a ship sails past, along the Tagus River in Lisbon July 11, 2013. (REUTERS/Rafael Marchante)
A woman walks past a closed shop in downtown Lisbon July 5, 2013. (REUTERS/Jose Manuel Ribeiro)
A couple walks past a closed shop in downtown Lisbon July 5, 2013. (REUTERS/Jose Manuel Ribeiro) 
A man looks out from a window at Alfama neighborhood in Lisbon August 3, 2013. (REUTERS/Rafael Marchante) 
A clothing store vendor waits for customers in downtown Lisbon July 25, 2013. (REUTERS/Rafael Marchante) 
A man walks past a shop which has closed down in downtown Lisbon September 3, 2013. (REUTERS/Rafael Marchante)
A man waves to the driver of a tram at Alfama neighborhood in Lisbon August 29, 2013. (REUTERS/Rafael Marchante)
A cyclist rides past graffiti reading, "defeat this government and this policy", in Cacem village, on the outskirts of Lisbon August 28, 2013. (REUTERS/Jose Manuel Ribeiro) 
A woman walks past graffiti with a message "The fight is the way" on a street in Venda Nova in the outskirts of Lisbon July 8, 2013. (REUTERS/Jose Manuel Ribeiro) 
Cleaners sweep the street in front of a closed restaurant in Alges, on the outskirts of Lisbon August 26, 2013. (REUTERS/Jose Manuel Ribeiro)
Waiters of a restaurant wait for customers at Alfama neighborhood in Lisbon August 21, 2013. (REUTERS/Rafael Marchante) 
A man rides a bicycle in downtown Lisbon July 15, 2013. (REUTERS/Rafael Marchante) 
A cyclist rides past a closed shop in downtown Lisbon August 17, 2013. (REUTERS/Jose Manuel Ribeiro) 
A man walks past graffiti, which reads "being robbed, long live Portugal", on a street in Alges, on the outskirts of Lisbon July 22, 2013. (REUTERS/Jose Manuel Ribeiro)
A man begs for money on a street in downtown Lisbon August 1, 2013. (REUTERS/Rafael Marchante)
Graffiti depicting the angel of death, with the word "Portugal", is seen at a closed factory in Lisbon August 5, 2013. (REUTERS/Rafael Marchante)

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