In a report on Portugal released on Wednesday, the European Commission said it was essential to guarantee an adequate budget and efficient control of expenditure in all sectors, combined with "decisive measures" to face high debt in hospitals and improve the financial sustainability of public companies and the pensions system.

The Commission also said in its Semester Winter Package that this could be complemented by a focus on the restraint of global expenditure and the implementation of a comprehensive strategy to reform the public administration in the medium-term, while at the same time making the fiscal system and the public expenditure more growth-friendly.

The low level of skills of the workforce was also an obstacle to the growth of investment and productivity, the Commission said, which required "public employment services and active policies in the job market."

Citizens in Portugal lack digital competence, which hinders inclusion, employability and competitiveness, according to Brussels.

The Commission said that despite a slow recovery since 2013, the levels of investment in Portugal continue to be low across all regions.