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The Portugal is not Greece, but …

After Greece, Portugal? The degradation of the note by the rating agency Fitch on Wednesday placed the country under the Lusophone market attention. But nothing is to fear the worst: Portugal is not Greece, although the weakness of its economy worries for the future.

"Comparing Greece and Portugal is really too simplistic," wrote economists at the outset of IPC BNP Paribas in a note. Take note first of the country. Greece, with a "BBB +" is two categories below Portugal, rewarded for his share of "AA-". The degradation of the note Portuguese did not, moreover, resulted in a panic on the markets.Shortly after the announcement of Fitch, the cost of insurance on the Portuguese debt increased by only 5 points early Wednesday afternoon, with 139 points, according to Markit data.

If Portugal has a higher score, mostly because its debt is less severe than that of Greece. It should reach 90% of GDP in 2010, when the Athens peak at 123.3% of GDP, according to the OECD.

Reform and credibility

The best that Portugal has maintained its accounts in large part to the reforms already carried out social security and pensions. Result, expenditures related to aging, reaching 16% of Greek GDP between 2010 and 2060, will be limited in the case of Portugal to 2.9%, calculated the European Commission. "The impact of these reforms will be felt in the future, limiting the burden of an aging population," noted economists at BNP Paribas CIB.

Having made these reforms in Lisbon has guaranteed a much greater credibility than that of Greece. Apart from a National Statistics trusted, the country should not face great opposition to social reforms, as demonstrated by the fiscal consolidation undertaken between 2003 and 2007 are essentially the economists.

Concerns for growth

The Portuguese public finances so little to do with those of Greece. But the economic prospects are not rosy, however. "Our concern is growth," says a note Gilles Moec, economists at Deutsche Bank. "We believe that the likelihood of a return to budget deficits of 3% by 2013 (against 9.3% in 2009, Ed) is low."

The country's lack of competitiveness, exports depend mainly on its neighbor Spain, very bad shape.Especially, the level of indebtedness of households and businesses has reached alarming levels, thus jeopardizing any hope of quick recovery in domestic demand and investment. According to Eurostat, household debt represented in 2008, 105% of GDP, and the business 134%. Cons respectively 61% and 62% in Greece.