Alvaro's post suggests that there is overwhelming evidence that the Euro is responsible for the current situation in Portugal. Alvaro, as well as some of the commentators to his post, suggest Portuguese politicians may envision abandoning the Euro if stagnation persists.
I am not sure I agree with the statement about the evidence. The evidence that I am aware of shows that common currency unions, such as the euro zone, tend to produce two main positive effects. First, they lower inflation. Second, they promote trade (by reducing transaction costs). The latter effect appears to be large and significant (see Frankel and Rose, QJE, 2002).
True, common currency areas prevent the use of domestic currency devaluation in adjusting to asymmetric shocks. However, do we really want to go back to the times when Portugal had such flexibility? Let's not forget Portugal had very weak monetary institutions, leading in particular to high inflation. One of the key benefits of the Euro was to allow Portugal to benefit from top quality monetary institutions. This has been invaluable to Portugal, we should not go back.
Moreover, currency devaluation is like a balloon of fresh air. Sooner rather than later, the fresh air will run out. If there are persistent problems underlying the stagnation, devaluating won't help; which means, I would not assign the blame to the Euro. I believe we do need to look for the deeper reasons of the Portuguese stagnation; I offered a couple of conjectures in a previous post.