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Thread: Portugal seeks EU bailout due to debt crisis

  1. #1
    Administrator Tarek Morgen's Avatar
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    Portugal seeks EU bailout due to debt crisis

    Portugal's prime minister has said his country will ask for a bailout due to its high debts and difficulty raising money on international markets.

    Prime Minister Jose Socrates said "the government decided today to ask the European Commission for financial help".

    Portugal becomes the third financially troubled eurozone country after Greece and Ireland to request assistance from Europe's bailout fund and the IMF.

    Analysts expect Portugal will need up to €80bn. A bailout had long been expected as Portugal, one of the 17-nation eurozone's smallest and weakest economies, struggled to finance its economy.
    full article here:

    Portugal seeks EU bailout due to debt crisis | World news | The Guardian

    While not a threat to the economic recovery of Europe as a whole due simply being a rather small economy this step has been unavioudable for quite some time and should have been taken sooner. What comes now will certainly not be easier for Portugal due the delay.

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    unavioudable for quite some time and should have been taken sooner
    agreed. Its been clear this would be the road for months

    the Spanish economy is the key but there hasnt been much coming out on that for awhile . Avoiding a bailout for the Spanish is vital for the continuation of the eurozone, although it may struggle to survive in its current format from some analysis that I have read.

    there is significnt exposure for the Spanish banks to Portugese debt and alot of the bailout money will undoubtely be going to the spanish bank bondholders. A portugese default is not an option in th is regard and the bailout is vital for stability to the spanish economy

    Moreover, Spanish banks could suffer if Portugal's financial problems worsen. Spain is not only Portugal’s biggest trade partner, it is also its biggest creditor, with Spanish banks holding $78 billion of Portuguese debt, according to the Bank for International Settlements.
    from an old article - see below
    Spain’s banks already have enough problems, but the exposure to Portugal could just turn into the wild cart which upturns the whole apple cart,” said Edward Hugh, an independent economist based in Barcelona
    as I said the bailout will insure against that
    2 above quotes from - Markets digest Irish bailout

    However even with the bailout ensuring that spanish banks are payed, the strong economic relationship between the 2 economies is likely to mean a further deterioration in the spanish economy imo
    Last edited by tantalus; 06 Apr 11, at 22:58.

  3. #3
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    I can haz monyez pleazzz?!

    If only the 2 idiots leaders of the 2 main parties had worked together we might have avoided this, but nooooo...

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