ASSESSMENTS

Portugal: Balancing Austerity With Stability

Feb 4, 2016 | 09:15 GMT

Portugal: Balancing Austerity With Stability
A Portuguese flag flies above people taking part in a demonstration in downtown Lisbon in 2013. Several thousands of people demonstrated today in the Portuguese capital to protest against government austerity measures.

(PATRICIA DE MELO MOREIRA/AFP/Getty Images)

Summary

Portugal's hopes of reaching an early agreement with the EU Commission on its 2016 budget were set back on Feb. 2 when Commission Vice President Valdis Dombrovskis warned that Lisbon had to introduce more measures to meet the deficit targets requested by Brussels. Portuguese Prime Minister Antonio Costa will now have to accommodate the European Union while placating his fragile, largely anti-austerity government and preventing its collapse. Portugal's economy will continue to grow this year, while unemployment is going down. However, prolonged political instability could once again cast that economic growth into doubt.

Portugal's hopes of reaching an early agreement with the EU Commission on its 2016 budget were set back on Feb. 2 when Commission Vice President Valdis Dombrovskis warned that Lisbon had to introduce more measures to meet the deficit targets requested by Brussels. Portuguese Prime Minister Antonio Costa will now have to accommodate the European Union while placating his fragile, largely anti-austerity government and preventing its collapse. Portugal's economy will continue to grow this year, but prolonged political instability could once again cast that economic growth into doubt....

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