Ireland, Portugal: A Potentially Troubled Bailout Exit

Over the past two years, Ireland and Portugal, unlike Greece, have maintained political stability and received praise for complying with bailout conditions, despite economic contraction and rising unemployment. But a graceful exit from the bailout could be challenging. Ireland and Portugal will see their bailout programs end over the next 12 months and are trying hard to regain the trust of international financial markets. Meanwhile, economic contraction continues, along with recent episodes of political instability, which risk weakening the markets' trust. Such conditions call into question Lisbon's and Dublin's ability to end their dependence on external aid completely.