How Portugal Became A Horrific Economic Mess

Portugal has again moved to the forefront of the European debt crisis after its constitutional court rejected struck down parts of the country's 2013 budget.

According to Nomura's Alastair Newton, this amounts to 20 percent of Portugal's austerity plan. This austerity was part of a bailout deal the country agreed to two years ago.

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Portugal, which has been undertaking comprehensive labor market reform, is still far from being back on track. According to The Economist, Portugal has arguably been the "most devout in repentance." However, the country is seeing increasing austerity protests.

In a presentation titled "Adjusting in the euro area: The case of Portugal" Portuguese finance minister Vitor Gaspar walks us through Portugal's economic crisis.

"Considering the events of 2008-2010 as a simple demand-driven business-cycle fluctuation was an error of judgment that proved to be expensive in the context of the euro area sovereign debt crisis," wrote Gaspar.

In addition to identifying errors, he also looks at the aftermath of the crisis and what the economy needs to do to return to growth and job creation.