The trade deficit...

it is impossible for a country to balance its government and business deficits while running a trade deficit. This is an accounting identity and is true for all countries at all times. Greece and others are in a monster predicament. No amount of austerity will work until their labor costs drop (for both private and government workers) and their trade deficits are brought into alignment.

From JohnMauldin.com (share this quote)

We have of course no news from the government concerning the trade deficit.  It seems to worry only people with common sense.  On the other hand, with a sufficient number of citizens broke and with no money to buy foreign goods - the problem might solve itself.  Except - what about Portugal having to import more than half of its basic necessities - such as food.

Portugal reported a trade deficit equivalent to 1323 Million EUR in September of 2011. Portugal major exports are: clothing and footwear, machinery, chemicals, cork and paper products, hides, tungsten and wine. Portugal imports mostly machinery and transport equipment, chemicals, petroleum, textiles and agricultural products. European Union is by far its largest trading partner accounting for about 72% of total trade.

Consider that Portugal has had a continuous trade deficit for 20 years now.   I do not know about you, but if I for twenty years had bought more than what I produced (earned) then I would be in real trouble by now and truly dependent on my creditors.