Portugal looks set for bailout
By Barry hatton and Pan Pylas |
March 31, 2011, Thursday
|
Print Edition
Print Edition
DEBT-HEAVY Portugal's hopes of avoiding a financial bailout were fading fast yesterday as the country's borrowing rates continued their upward spiral to hit new euro-era highs.
The yield on the 10-year government bonds rose another 0.03 percentage point to 8.02 percent, the highest since Portugal joined the eurozone in 1999.
Portugal accounts for less than 2 percent of the bloc's gross domestic product, but its troubles could weaken market confidence in the eurozone's efforts to beat a sovereign debt crisis that has plagued it for more than a year. Europe has already had to come up with multibillion bailouts for Greece and Ireland.
Lisbon's rise in borrowing rates came a day after Standard & Poor's downgraded its credit rating on Portugal's bonds to BBB-, just one notch above junk status.
The agency said Portugal's high debt load and poor growth prospects make it likely the country will wind up needing a financial rescue package. Analysts estimate it would need up to 80 billion euros (US$113 billion).
Portugal's problems have metastasized over the past week - the government quit, rating agencies have three times downgraded its credit worthiness, interest rates have surged, and strikes by workers angered by austerity measures have shut down transit systems.
Portugal faces a key test in April when it has to rollover 4.5 billion euros. Another crunch comes in June when it has to find 4.96 billion euros for another bond repayment.
Officials say they have so far raised about one-third of the 20 billion euros the country needs to finance its economy this year and can meet the April settlement.
But the markets think June's auction could well be the catalyst for a bailout request, said Marc Ostwald, market strategist at Monument Securities.
The yield on the 10-year government bonds rose another 0.03 percentage point to 8.02 percent, the highest since Portugal joined the eurozone in 1999.
Portugal accounts for less than 2 percent of the bloc's gross domestic product, but its troubles could weaken market confidence in the eurozone's efforts to beat a sovereign debt crisis that has plagued it for more than a year. Europe has already had to come up with multibillion bailouts for Greece and Ireland.
Lisbon's rise in borrowing rates came a day after Standard & Poor's downgraded its credit rating on Portugal's bonds to BBB-, just one notch above junk status.
The agency said Portugal's high debt load and poor growth prospects make it likely the country will wind up needing a financial rescue package. Analysts estimate it would need up to 80 billion euros (US$113 billion).
Portugal's problems have metastasized over the past week - the government quit, rating agencies have three times downgraded its credit worthiness, interest rates have surged, and strikes by workers angered by austerity measures have shut down transit systems.
Portugal faces a key test in April when it has to rollover 4.5 billion euros. Another crunch comes in June when it has to find 4.96 billion euros for another bond repayment.
Officials say they have so far raised about one-third of the 20 billion euros the country needs to finance its economy this year and can meet the April settlement.
But the markets think June's auction could well be the catalyst for a bailout request, said Marc Ostwald, market strategist at Monument Securities.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 娌狪CP璇侊細娌狪CP澶05050403鍙-1
- |
- 浜掕仈缃戞柊闂讳俊鎭湇鍔¤鍙瘉锛31120180004
- |
- 缃戠粶瑙嗗惉璁稿彲璇侊細0909346
- |
- 骞挎挱鐢佃鑺傜洰鍒朵綔璁稿彲璇侊細娌瓧绗354鍙
- |
- 澧炲肩數淇′笟鍔＄粡钀ヨ鍙瘉锛氭勃B2-20120012
Copyright 漏 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
