Wake-up time for Portugal

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Wake-up time for Portugal

Portugal's banks have got to grips with the pressures of EU membership much more effectively than the economy as a whole, which has depended on ad hoc measures rather than fundamental structural change to keep on course. But even the banks must expect more consolidation and rationalization.

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THE MOTORWAYS HAVE been built, the stock exchange has joined the big league by linking up with Euronext, Lisbon has had its Expo and the banking industry has pushed years ahead to rank as one of the most efficient in Europe. But as many voices are reminding the government, it's now wake-up time for Portugal.

"Portugal is going through a period of uncertainty but I am confident that things can only improve," says Rui Semedo, country manager of Barclays Portugal. "The country has had a very complex history over the past three decades and, unlike Spain, we did not have a large internal market to build on. Now the infrastructure is in place so the task is to strengthen and stabilize the economy."

Some of the most frequently heard complaints point to years of political instability and continuing macroeconomic adjustment, both of which are putting the brakes on growth potential. Since prime minister Antonio Guterres was forced out of office in 2001 after a defeat in the municipal elections by the ruling Socialist Party, the country has gone through coalition government and a call for early general elections that brought the socialists back into power.

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