President Barack Obama on Friday praised the steps Portugal Prime Minister Jose Socrates is taking to reduce his nation's budget deficit and debt.

Obviously Portugal is working through challenges created by financial markets and I think that it's important to note that the Prime minister has committed himself to a very vigorous package of economic steps, and we are going to be working with all of Europe as well as Portugal to support these efforts, Obama told reporters in Lisbon.

The President's comments came in a meeting ahead of the NATO summit, where he is meeting with North American and European allies to strengthen military ties. His agenda also includes a brief meeting with European Union Leaders.

Obama also met with Portugal President Anibal Cavaco Silva who said he was happy to hear the U.S. authorities reiterate their trust on the portuguese capability to overcome the challenges it is faced with.

Portugal's President is a non-executive role as opposed to the Prime Minister, which functions as chief executive of the government.

Cavacao said Portugal's export to the U.S. are still far from what they could be.

Obama said he was looking to deepen our partnership in trade and investment, in science and technology.

I am very impressed with the outstanding work that Portugal has done in areas like clean energy, and we think that we can collaborate more, Obama said.

After his meeting with Socrates, Obama said new partnerships between Portuguese and American companies are leading the way in wind power.

The Prime Minister's leadership on electric cars will create new opportunities for American companies here in Portugal, he said.