As the Greek tragedy plays out, managers are turning their eyes to Portugal - and they do not generally like what they see.

A recent note from German ratings agency Feri EuroRating Services supported a fairly negative view on the country's finances. "Portugal remains clearly non-investment grade," the Bad Homburg-based agency said in a recent briefing note. It rates Portugal D.

Axel Angermann, head of economics at Feri EuroRating Services, said its rating "signals that there is a high risk Portugal will not completely honour its obligations." He did, however add that Feri did not see an acute risk of a debt haircut, as Greece's private bondholders face.

But Feri forecast Portugal's economic output will shrink by more than 3% this year despite introduced savings measures. "Similarly to Greece, Portugal is fighting against a fundamentally uncompetitive economy and, in comparison to the rest of Europe, a weak industrial base."

Feri foresees Portuguese economic stagnation in 2013, and 1% growth in 2014.

Feri also pointed to the weakness of its growth exacerbated by being "on the edge of Europe geographically", and its dependency on Spain, "which is just as rattled by the crisis".

Neil Dwane, CIO in Europe for Allianz Global Investors unit RCM, said he believes Greece is "bust", and "clearly what we have seen particularly dramatically in the last couple of weeks is that the market has decided now that Portugal, too, is bust."

He said Portugal "will become a clear issue - they have only just started to implement their austerity measures and the structural difficulties are already becoming very clear".

One problem for Lisbon, Dwane said, is that all Portugal's debt is governed by English international law, so Lisbon cannot change the rules as the Greek government can through a bill in parliament.

"The Portuguese will, at some point, have to negotiate international law, which gives them absolutely no preferential treatment." Dwane said this could be one reason the European Central Bank recently stopped buying Portuguese debt.

"If there is a restructuring, everybody will take a haircut, not just the people who the ECB and the EU say will take a haircut."

But Feri said Lisbon showed it was willing to reform the nation, so there should not be the "downwards spiral" Athens has experienced.

Dwane shares Feri's view of a long, slow recovery for the eurozone's other heavily indebted nations.

He noted: "It has taken Italy 20 years to get itself to where it is [and] I see no reason to think that it will take less than that for Italy to become more efficient and more competitive. Italians are currently 20% less effective than Germans. This is a very big challenge that everyone has to face. And I think the challenge is to try to provide a sense of growth and a sense of hope to their citizens so that they feel this is a journey worth travelling."