NÓS VISTOS POR ELES: «Pigs might fly»

«At the height of the 2008-09 financial crisis, a new acronym entered the lexicon of financial journalists: the PIGS. In sharp contrast to the (then) fast-growing BRICS, the PIGS represented the crisis-hit countries of Portugal, Ireland, Greece and Spain. While all suffered deep recessions, the dynamics in each of them were quite different. Portugal was often seen as the next most-vulnerable after Greece, but so far it has defied the sceptics by exiting its EU/IMF bail-out programme earlier than it needed to and refinancing many of its loans at lower rates by tapping private capital markets.

In part, this is due to a fairly high degree of policy consensus among Portugal's two main parties and strong public backing for continued euro zone membership. In contrast with many other EU countries, Portugal lacks a strong anti-euro party. When you consider the scale of the country's fiscal contraction—moving from a primary budget deficit of 8.5% of GDP in 2010 to an estimated surplus of 0.2% this year—that is remarkable.

All four PIGS countries are set to have elections in the next six months and Portugal will be going to the polls on October 4th. The first challenge for the next government—likely to be a minority administration led by the current centre-left opposition—is to continue reforms now that the external pressure has lessened. The second challenge is to prepare for Portugal's longer-term problems of demographic decline and stagnating productivity.»

Simon Baptist, Chief Economist, The Economist Intelligence Unit