Portugal's left-leaning government has set out to reverse its predecessor's austerity policies, aiming to grow its way out of trouble by boosting demand and set an example for other post-bailout euro zone countries.
But European authorities have responded by raising pressure for budget deficit cuts, which tepid economic growth alone is unlikely to deliver despite Lisbon's assurances. Any increase in purchasing power may be too slight to fuel the desired economic take-off, setting up a clash with Brussels soon.
Parliament's approval of the 2016 budget last week marked the most explicit attempt so far by a euro zone country to roll back reforms and spending cuts imposed during an EU/IMF bailout.
It came after social democratic leaders from around Europe, hosted by French President Francois Hollande, agreed at a March 12 Paris meeting to push back against German-driven austerity policies and press for more EU initiatives to revive growth.
The Portuguese budget assumes growth of 1.8 percent this year but many analysts doubt even this reduced forecast will be achieved after 1.5 percent in 2015.
The shaky alliance of a minority Socialist government and its leftist allies in parliament - the Communists and Left Bloc - has started to deliver on promises to restore public sector wages and pensions to levels before the 2010 debt crisis.
They have raised the minimum wage, cut crisis-time tax surcharges and reintroduced four public holidays.
Other peripheral euro zone countries have also begun to chip away at austerity. In Spain, the center-right government restored before elections in December part of an annual 13th month bonus paid to civil servants canceled in 2012.
Italian Prime Minister Matteo Renzi, whose country avoided a bailout but has the highest debt ratio of any euro zone state except Greece, is also pushing for more fiscal leeway from Brussels to stimulate the economy.
Ireland called time on seven years of severe austerity in its 2015 budget and continued to use the spoils of a booming economy this year to further reduce income taxes, reverse unpopular bailout cuts and raise public sector wages.
But while Ireland's phenomenal 7.8 percent growth meant its 2015 deficit of 1.5 percent of gross domestic product was far below the EU limit of 3 percent, Spain and Portugal both missed their deficit targets last year.