The hypothesis of a second rescue stirs the Portuguese politics
Government and opposition today held a tough matchup in Portugal due to the assumption that the country needs a second bailout for failing to return to the markets of long-term debt in the second half of 2013.
Parliamentary Affairs Minister Luso, Miguel Relvas, insisted the speech held by the conservative government yet that the country will achieve its goal if nothing extraordinary, while the Left parties questioned the adjustments and austerity strategy chosen by the government.
The controversy arose after the publication today in the German newspaper “Die Welt” from an interview with Prime Minister Luso, Pedro Passos Coelho, in which he admits having doubts about whether Portugal will be able finally to auction of new long-term debt.
“I do not know if the markets will return to Portugal in September 2013 or later” admitted the head of government Luso.
Passos Coelho said, as he had done on other occasions, the European Union (EU) and International Monetary Fund (IMF) “and gave assurances” that will help the country if they could not issue long-term debt external reasons provided it complies with the program of measures agreed last year in exchange for ransom.
The EU and the IMF Portugal granted a loan of 78,000 million euros in May 2011 that allows the country to meet their financial needs until the second half of 2013 paying interest a priori lower than he would if long-term debt issued, auction to which does not use since then.
In his interview to German newspaper, the prime minister said the Luso help of international institutions need not necessarily involve a second rescue, but can opt for other ways to realize this support, without specifying details.
The Socialist Party general secretary, Joao Ribeiro, considered, was quoted by the state agency Lusa, a sign of “control” by the conservative government change in the position of Passos Coelho, who until now had always been convinced Portugal to achieve their goals.
Luso from the Communist Party warned that the recent remarks of Prime Minister show that the government chose the wrong way to save the country.
The Marxist Left Bloc abounded in this idea and returned to question the suitability of the severe austerity measures introduced by the Portuguese conservative.
At a press conference, Minister Relvas stressed that “there is nothing new” in the official government position and said the country will return to long-term markets in September next year “under normal circumstances.”
Investors, rating agencies and analysts already predict that for months Portugal will have no choice but to use another bailout based on high interest rates that still criminalize its long-term debt in the secondary market, used as an indicator.
Lusas obligations to ten years were quoted on Friday slightly below 12 percent, a rate that experts consider unaffordable.
The Luso Government, meanwhile, stresses that these interests are down more than five points since they reached a record high (17 percent) in late January.
Reflection of the confidence of the Executive in the market pressure is deflating is its decision to issue short-term debt with maturities longer and longer.
Portugal last week successfully completed its most recent auction by placing 1,000 million euros to 18 months, the longest term auctioned for a year, at an interest rate of 4.53 percent and 500 million in bonds to six months exchange for a return of 2.9 percent.
Category: Money
