Fri, April08, 2011
English.news.cn 2011-04-08 08:25:30
LISBON, April 7 (Xinhua) -- Portugal will ask Thursday for the EU financial aid, said the minister for the presidency of the council of ministers, Pedro Silva Pereira, at the end of the weekly government meeting.
However, Pereira did not specify the amount Portugal will ask for.
"This will depend on the negotiations the government will have with the European authorities. The request the Portuguese government will send to the European Commission and the dialogue we will have with them will establish the instrument and the amount that will be used," he said.
According to the minister, the European Union (EU) authorities and the European Central Bank already expressed their availability to send a joint team to Portugal to start the negotiations.
Due to the fact that Portugal will have general elections in June 5 and the government can not commit the country after that date, the solution should be a short term loan until the new government would be inaugurated. ByXinhua
Showing posts with label Portuguese government. Show all posts
Showing posts with label Portuguese government. Show all posts
Friday, April 8, 2011
Friday, March 25, 2011
Portuguese debt rating downgraded by Fitch
Fri,Mar25, 2011 11:24:53 English.news.cn
LISBON, March 24 (Xinhua) -- Fitch credit rating agency Thursday downgraded Portuguese debt to A- from A+, saying risks to the country's economy rose after the parliament failed to pass an austerity measure and the prime minister stepped down.
According to the rating agency, Portugal can no longer afford to maintain market access to refinance its sovereign debt this year. The Portuguese banks will face a peak in their refinancing needs of about 45 billion U.S. dollars in April.
Wednesday's decision at the parliament has led to a record high of the Portuguese yield. The interest rate of Portuguese 5-year bonds climbed to 8.339 percent in the secondary market Thursday, and 10-year bonds rose to 7.695 percent, reaching a record high since the country entered the eurozone.
Portuguese Prime Minister Jose Socrates resigned Wednesday night after the country's parliament voted against his new round of austerity measures aimed at reducing a high budget deficit to avoid a bailout.
The Portuguese government announced a series of adjustment measures during the past year to underline its commitment to reducing its budget deficit from 7.3 percent of gross domestic product in 2010 to 4.6 percent in 2011.
(Xinhua)
Portuguese Prime Minister Jose Socrates resigned Wednesday night after the country's parliament voted against his new round of austerity measures aimed at reducing a high budget deficit to avoid a bailout.
The Portuguese government announced a series of adjustment measures during the past year to underline its commitment to reducing its budget deficit from 7.3 percent of gross domestic product in 2010 to 4.6 percent in 2011.
(Xinhua)
Friday, March 11, 2011
Eurozone leaders to begin crucial bail-out fund talks
Friday, 11 March 2011 15:03
he 17 leaders of eurozone nations will finally sit down together later to forge their long-touted plans to secure the future of their currency zone.They do so as government borrowing costs again hit the roof.Europe's lenders don't
like what they are hearing on the Brussels grapevine. The driving factor is the worry that the summit set up expressly to forge a firm and permanent agreement between the 17 will end with a fudge. That worry has send the interest rate on the Portuguese government's 10-year bonds back to record highs.
Italy, Spain and Greece's governments are also being hit hard by high borrowing rates.
This emergency summit has been long awaited, but the fear is that all the tricky stuff setting out the terms that will underpin any future bail-outs from 2013 will probably be put back once again to be discussed further at the next full EU summit on 24 and 25 March.
Squeezed session
The agenda arrangements themselves don't bode well.
The emergency euro summit has now been squeezed into a late afternoon session because of the Libyan emergency.
But it's not just a case of there being too little time to thrash out an agreement. Diplomats and other sources have been carefully managing down commentators' expectations.
What has been agreed in principle by finance ministers is that the new permanent bail-out fund, the European Stability Mechanism (ESM) - which is designed to replace the current European Financial Stability Facility (EFSF) - will hold a total of 500bn euros ($690bn; £430bn).
This will be topped up by the IMF, but the markets are concerned that it won't be enough should Portugal and Spain both need to be bailed out in the near future.
It is if, or when, the permanent bail-out fund starts to prove inadequate that the question of the future oversight of national economies becomes crucial.
Large members such as Germany and France may not be prepared to cough up further if they have little influence on the peripheral countries' spending habits.
So what is the mechanism for sorting all this out and how is it going down?
In two words: Not well.
Bankroller
Germany, the eurozone's biggest single rescue bankroller, got the ball rolling and managed to win French support for a pact to tighten rules on state spending all round the eurozone.
This plan was big on reforms to boost competitiveness with the best performer to be used as a benchmark for others to emulate.
Germany also wanted things like wages indexed to inflation, higher retirement ages and borrowing limits, something that would prove very hard to sell to voters.
The pact idea was taken up with enthusiasm by the European Commission - but watered down - especially when it came to the provisions relating to competition.
Now, the word is that even this version is causing disagreement.
In particular, there appears to be less emphasis on the degree of oversight member countries would allow each other. The problem here is that the more the plan moves away from Germany's original concept, the less likely Germany may be willing to sign off a deal.
Many other related issues are pressing in on the 17 eurozone members.
The Greek and Irish premiers will continue to press the rest to agree for easier terms on their bailout loans.
Fundamental flaw
The ECB President Jean-Claude Trichet will also be at the summit. He's been desperately trying to ease up on the central bank's expensive daily support buying of weak eurozone countries' debt - notably that of Portugal.
One partial solution could be to allow the future rescue fund to be more flexible, so it too could buy the likes of Portuguese bonds.
But Germany is implacably opposed to that idea.
The eurozone countries are, essentially, grappling here with the fundamental flaws in the Euro project itself.
Ultimately, only more economic discipline enforced from the centre can probably ease those troubled debt markets.
But Friday's summit may once again see the divergent interests of Germany, France and the poorer peripheral countries getting in the way of a breakthrough.
Source: BBC
like what they are hearing on the Brussels grapevine. The driving factor is the worry that the summit set up expressly to forge a firm and permanent agreement between the 17 will end with a fudge. That worry has send the interest rate on the Portuguese government's 10-year bonds back to record highs.
Italy, Spain and Greece's governments are also being hit hard by high borrowing rates.
This emergency summit has been long awaited, but the fear is that all the tricky stuff setting out the terms that will underpin any future bail-outs from 2013 will probably be put back once again to be discussed further at the next full EU summit on 24 and 25 March.
Squeezed session
The agenda arrangements themselves don't bode well.
The emergency euro summit has now been squeezed into a late afternoon session because of the Libyan emergency.
But it's not just a case of there being too little time to thrash out an agreement. Diplomats and other sources have been carefully managing down commentators' expectations.
What has been agreed in principle by finance ministers is that the new permanent bail-out fund, the European Stability Mechanism (ESM) - which is designed to replace the current European Financial Stability Facility (EFSF) - will hold a total of 500bn euros ($690bn; £430bn).
This will be topped up by the IMF, but the markets are concerned that it won't be enough should Portugal and Spain both need to be bailed out in the near future.
It is if, or when, the permanent bail-out fund starts to prove inadequate that the question of the future oversight of national economies becomes crucial.
Large members such as Germany and France may not be prepared to cough up further if they have little influence on the peripheral countries' spending habits.
So what is the mechanism for sorting all this out and how is it going down?
In two words: Not well.
Bankroller
Germany, the eurozone's biggest single rescue bankroller, got the ball rolling and managed to win French support for a pact to tighten rules on state spending all round the eurozone.
This plan was big on reforms to boost competitiveness with the best performer to be used as a benchmark for others to emulate.
Germany also wanted things like wages indexed to inflation, higher retirement ages and borrowing limits, something that would prove very hard to sell to voters.
The pact idea was taken up with enthusiasm by the European Commission - but watered down - especially when it came to the provisions relating to competition.
Now, the word is that even this version is causing disagreement.
In particular, there appears to be less emphasis on the degree of oversight member countries would allow each other. The problem here is that the more the plan moves away from Germany's original concept, the less likely Germany may be willing to sign off a deal.
Many other related issues are pressing in on the 17 eurozone members.
The Greek and Irish premiers will continue to press the rest to agree for easier terms on their bailout loans.
Fundamental flaw
The ECB President Jean-Claude Trichet will also be at the summit. He's been desperately trying to ease up on the central bank's expensive daily support buying of weak eurozone countries' debt - notably that of Portugal.
One partial solution could be to allow the future rescue fund to be more flexible, so it too could buy the likes of Portuguese bonds.
But Germany is implacably opposed to that idea.
The eurozone countries are, essentially, grappling here with the fundamental flaws in the Euro project itself.
Ultimately, only more economic discipline enforced from the centre can probably ease those troubled debt markets.
But Friday's summit may once again see the divergent interests of Germany, France and the poorer peripheral countries getting in the way of a breakthrough.
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