Across the continent governing centre-left parties have been crushed by austerity policies. France and Italy were unable to kickstart their weak economies as they stuck to the EU’s tough public deficit limits. Greece’s far-left Syriza government won power by railing against the detailed austerity measures required under its bailouts fromthe EU and IMF — only to implement many of them once in office.

Portugal’s centre-left government took a different course. It initially clashed with Brussels by reversing public spending cuts and allowing the deficit to swell well above agreed objectives, before ultimately proving to EU officials that by putting more money in people’s pockets it could lift growth, and make it easier to meet budget targets.

As Portugal heads towards a zero deficit this year, Italy is struggling to keep its deficit under 2 per cent of GDP — far higher than the EU-mandated target of 0.8 per cent — and that only after Rome’s populist coalition agreed to delay expansionary measures. While Matteo Salvini, Italy’s deputy prime minister, lashes out against EU-driven austerity, Mr Centeno urges restraint, saying earlier this year that “there is no room for easy or populists solutions”.

Compared with Greece, Portugal — even under Mr Costa’s anti-austerity government — has adopted a far more conciliatory approach to Brussels. Despite pressure from the leftwing parties supporting the PS government, it has never proposed any write-off of public debt, arguing instead for better terms as part of a wider EU agreement. Public debt is on a downward path — Mr Costa is targeting a reduction to 118 per cent of GDP this year. On his watch, the three big rating agencies have also lifted Portugal above junk status.

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