Portugal Fights Desperately to Regain Trust - Spiegel Online International, 13-01-2011
«Portugal's current outlook isn't good. The entire country is groaning under the weight of major structural problems. In recent years, the economy has barely grown and in 2011 the country could fall back into a recession.»
«Most investors now believe Portugal will have to seek aid from the EU. "That's the consensus," says Commerzbank analyst Schnauz. Kiel-based economist Langhammer believes that an EU-IMF bailout will be the only way the country can win back the trust of markets. And it is the only opportunity for the country to get loans at lower interest rates.»
Still scary - The Economist, 13-01-2011
«(...) Portugal paid dearly for its success: the yield on the June 2020 bond was a whopping 6.7%. Granted, that was lower than the 7% at which ten-year bonds had traded earlier in the week (see chart 1), before reports of heavy purchases by the European Central Bank (ECB) pushed the yield down. But it is unsustainable for a country whose public debt is high and rising.»
«José Sócrates, the prime minister, said this week that Portugal’s 2010 budget deficit would fall “clearly below” the government’s target of 7.3% of GDP. Portugal was one of the few EU countries to cut its deficit by more than two percentage points in 2010, he said. Yet revenues booked from the transfer of Portugal Telecom’s pension funds to the state explain much of the improvement. The dilatory pace of fiscal consolidation is unlikely to assuage investors for long. The auction’s success may offer only temporary respite. Investors in the euro zone’s bond markets have seen the film before.»
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