Portugal's Comeback Is Only a Start

If there’s a symbol of the breadth of the euro zone’s recovery, it’s Portugal. In 2011, it had to accept an international bailout on punishing terms. Today, three years after graduating from that program, growth and confidence have returned. As if to mark the achievement, S&P Global Ratings just raised Portugal’s sovereign rating to investment grade.

This success is real -- but making it last will require more work. The banking system is struggling under the weight of nonperforming loans, which squeezes credit for good borrowers. The government is cutting capital projects to increase its day-to-day spending. These and other issues will have to be addressed for Portugal to turn a cyclical upswing into faster long-term growth.