When Standard & Poor’s (S&P) raised Portugal’s credit rating outlook from negative to stable in March 2013, the decision – which in happier times would be have been confined to the business news – made front-page headlines in the country. Prime minister Pedro Passos Coelho described it as a “gesture of reward for the enormous sacrifices” his government’s austerity measures have forced the Portuguese people to make.
Although S&P maintained Portugal’s long-term sovereign debt rating at BB, two notches below investment grade, the fuss was understandable. According to the headlines, it was the first time a credit rating agency had changed its assessment of Portugal in a positive direction for 14 years.
