This report by European Commission services assesses compliance with the terms and conditions of the Third Review under the Economic Adjustment Programme.

A joint Commission/ECB/IMF mission met with the Portuguese authorities in Lisbon from 15 to 27 February 2012. The mission found that the programme is on track. The fiscal adjustment in 2011-2012 is remarkable by any standards. The necessary deleveraging of the financial sector is progressing in an orderly manner. Reforms in labour and product markets aimed at raising competitiveness, growth and job creation are advancing and framework conditions for doing business are being improved. This report provides an assessment of compliance and summarises the findings of the mission.