Op-ed: Portugal problem overlooked during EU summit

The European summit resulted in the financial stability pact that Berlin wanted an agreement that could have avoided the Greece debacle. Clearly, austerity as the only reform measure does not work. Take a look at Portugal, who is likely to be the next country to go bankrupt.

The lesson learned from Greece is that a process of cutbacks and reforms tends to lead to a recession and demands significant stimulus, not high interest credit. Specializing in non-competitive industries, the Portuguese economy is losing business to emerging markets and is outsized in relation to its GDP. If the EU stabilizes, get ready for the strong possibility that Greece is not the only insolvent state.