Portugal Bailout To Be The Last?
France will start a busy week and a busy year of selling debt – it aims to raise 8.5 billion euros on Monday. Also Germany, Belgium and the Netherlands will raise money, but the focus will be on Portugal, which will go for a modest 0.5 billion euros on Wednesday.
Portugal is marked as the next domino in the European debt crisis – asking for a bailout from the European Union – the third country to get a bailout. In an article in the Wall Street Journal, we hear that Portugal may be the last country to be bailed out, meaning the crisis won’t reach the huge economy of Spains:
Intesa Sanpaolo’s forecast assumes the country will turn to European Union for help in the first quarter. But the bank also thinks no further bailouts will follow.
“We believe the euro government bond crisis should be overcome without other countries reaching the point of default,” Intesa Sanpaolo strategists said. If tensions mount but don’t lead to a bailout, the expected trend of euro spreads would not necessarily change a lot, they said.
Anyway, the success or failure of bond auctions in the first week of 2011 will set the tone for the whole quarter, perhaps for the full year.
Some fear that 2011 will be much worse – Credit Crunch 2.
The Euro ended the year on a high note, 1.3383. What’s up for the Euro this week ? Check out the EUR/USD forecast.
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When will these anti-Portugal articles end? I al from France and I am definitely tired of hearing reporters from all over the world repeating the same story a billion times over, it does not make any sense… if anything the crisis in Portugal was created by the media, which has been writing fearmngering news articles about Portugal’s economy for the past 7 months, and on top of that, quoting credit companies!!! what else did you expect them to say?? The Portuguese economy is in as much of a bad shape as is the next country! Journalists should start beilng more impartial , and mostly, less impartial to the big financial corporations ahich obvioulsy only want to attack the euro-union! Time to leqve Portugal alone, it is highly unlikely that they will need a bailout, because they are NOT in the same situation greece and ireland were. How hard can it be for journalists to figure this one out. voila
Antonio, thanks for your comment. You may be right, and the situation in Portugal is indeed better. The problem is that these reports can manifest themselves – higher interest rates for bonds mean a deteriorating situation. When Portugal will need to raise money, quite soon, we’ll see what happens.
Happy 2011!
well then perhaps it’s time to give the reports less attention… Or are we all so naif that we think that if Portugal goes SPain will not go too? and Italy, and Belgium, and the rest of Europe? we have to be real about this and the markets are saying one thing and the press something very different. Portugal will only have problems if investors fall into this ruse mounted by the very same credit companies! The yields aren’t even that high in comparison with the rest of the world; only high european. Bonne Annee a toi aussi
Antonio, credit rating agencies are always late, but the “bond vigilantes” strike, and strike hard. Yes, Portuguese yields aren’t as bad as Argentina and Ireland, but they’re on the rise. Bonne année and merci beaucoup for visiting my site…
this persecution of Portugal starts to make me sick…
The persecution of Portugal makes me sick also