Portugal: Balancing Austerity With Stability

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.