The vice-president and senior analyst at Moody’s, Evan Wohlmann, said the EC recommendation that Portugal could leave the EDP recognised better fiscal performance than had been expected in 2016, with the budget deficit falling to 2.0% compared with 4.4% in 2015, and the EC conviction “which we share” that the deficit will remain under 3% in 2017 and 2018.

Moody’s said that despite the revenues being lower that budgeted, the significant reduction in spending (namely capital spending) and a tight control of the spending on goods and services, were enough to reduce the Portuguese deficit to lower than expected, the rating agency said.

The European Commission recommended on Monday at the meeting of EU finance ministers (Ecofin) to close the Excessive Deficit Procedure that it had applied to Portugal since 2009.