“Lisbon has taken the right path”. This was stated by officials of the Troika (EU, ECB and IMF) and Olli Rehn, the vice president of the European Commission, stated it, referring to the program of consolidation of the accounts adopted by Portugal. The country saw a 2011% contraction in GDP in 1,5 and a 3,3% recession is expected this year. Nevertheless the European technicians have announced that this year Lisbon will reach the objective of 4,5% of the deficit/GDP ratio. The Commission does not seem concerned about the low growth prospects this year, as it expects "the bulk of the adjustment in 2011 and 2012" and predicts that "the Portuguese economy will start to expand again starting next year" , ending the two-year recession.
Brussels also appreciated the efforts of the Portuguese country to restore public finances, recapitalize the banking system and structurally reform the economy. Likewise yesterday the President of the Commission, Durão Barroso, appreciated the increase in exports at the beginning of the year. However, Lisbon still faces the biggest challenge: the reform of the labor market.
But for now at least the good news has come from Europe: the green light from the experts is the green light to give Portugal the new tranche of aid worth 14,9 billion euros. This wave is part of the €78 billion aid package approved last year.
