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A new assessment of the action taken by Portugal to correct the excessive deficit by 2015 in response to the Council Recommendation of 21 June 2013, leads to the following conclusions: — Following the notification of the 2015 general government deficit and its validation by the Commission (Eurostat), the 2015 deficit came out at 4,4 % of GDP, above the Treaty reference value of 3,0 % of GDP. The gap vis-à-vis the reference value was largely due to a financial sector support measure in the context of the resolution of Banif (Banco Internacional do Funchal, SA) at the end of 2015, which had a negative impact of 1,4 % of GDP on the government deficit. Taking that element together with one-off revenue items, the deficit net of one-off measures would still have been just above the Treaty reference value. — The cumulative improvement in the structural balance in the period from 2013 to 2015 is estimated at 1,1 % of GDP, significantly below the 2,5 % of GDP recommended by the Council. When adjusted for the effects of revised potential output growth and revenue windfalls or shortfalls compared to the baseline scenario underpinning the recommendation, the cumulative improvement is reduced markedly to – 0,1 % of GDP. — The amount of measures implemented until June 2014 was in line with the targets under the macroeconomic adjustment programme. Thereafter, the amount of permanent consolidation measures underpinning the budgetary targets for 2014 was significantly reduced over time from 2,3 % of GDP planned at the time of the 2014 budget to around 1,5 % of GDP in the projection underlying the 2015 budget. Thus, the amount of measures taken falls clearly short of the recommendation to take at least 2,0 % of GDP of additional measures in 2014. For 2015, the amount of permanent fiscal consolidation measures was further reduced to around 0,6 % of GDP in the 2015 budget and the headline target was set at 2,7 % of GDP. Thus, the planned structural consolidation measures were insufficient to achieve the recommended 2015 deficit target of 2,5 % of GDP. The 2015 deficit outturn confirmed that the planned measures were insufficient. — Overall, since June 2014 the improvement of the headline deficit has been driven by the economic recovery and reduced interest expenditure in a low-interest rate environment. Windfall gains were not used to accelerate the deficit reduction and the volume of structural consolidation measures was not sufficient to reach the targets. — General government gross debt has broadly stabilised since the Council Recommendation of 21 June 2013 reaching 129,2 % of GDP at the end of 2013, 130,2 % of GDP in 2014 and 129,0 % of GDP in 2015 according to the Commission 2016 spring forecast. — Fiscal-structural reforms have progressed in most areas albeit at a differentiated pace. The Budget Framework Law was revised and strengthened and it is set to fully enter into force in September 2018. Considerable efforts have been made to curb tax fraud and evasion and to reform the tax administration. The long-term sustainability of the pension system has been improved in recent years, while short- and medium-term challenges remain. Reform in the healthcare system with a view to ensure the sustainability of the national health service (NHS) are progressing at an adequate pace. Public administration reforms to improve fiscal management at regional and local levels have been implemented over the past years as well as reforms to the public-private partnerships (PPPs) and state-owned enterprises (SOEs), particularly during the economic adjustment programme duration.