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Will Portugal follow Greece into the financial mire?

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Will Portugal follow Greece into the financial mire?


Public transport workers in Lisbon have responded to a pay freeze as part of their government’s austerity plans by staging a strike.

Concerns abroad are growing that debt-burdened Portugal is not doing enough to reduce its public sector spending and is about to follow Greece into a financial mire.

Like Greece, Portugal’s credit rating has been slashed although not as far as Athens, but a two notch reduction to “A minus” promptly increased its borrowing costs.

Portugal’s public debt is estimated to reach 86 per cent of gross domestic product this year.

That is still nothing like Greece’s 124 per cent but it is still a huge burden and the European Commission believes Lisbon is relying on over-optimistic growth prospects to cope with the deficit.

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