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Portugal Denies Reports That It Is Under Pressure To Seek Eu Aid

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"This story has no foundations, it is false," a Portuguese government spokesman said.

Isn't that exactly what Ireland said at first. In fact, isn't it the standard expected response from all governments / banks / PLC's etc. etc when under fire?

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http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8249426/Rumour-of-80bn-bail-out-to-squeeze-Portugese-bonds.html

Aníbal Cavaco Silva, the Portuguese president, said he had no intention of asking the International Monetary Fund (IMF) or Europe for financial help.

The comments came after Germany's Der Spiegel magazine and senior eurozone sources claimed that Germany and France will push Portugal to tap the rescue fund set up for European countries facing debt problems.

Mr Cavaco Silva told Portugal's Público newspaper that he was "surprised" a German magazine is publishing news of such importance to a European Union member state without the issue being discussed by the EU authorities.

Still, Portugal's finances appear to be coming under fresh scrutiny over whether it will have to take financial help from the EU and the IMF.

Europe is anxious to stop the sovereign debt crisis from spreading across the eurozone, having already bailed out Ireland and Greece.

It's only €80bn bail-out, chicken feed.

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Ireland said the same, as did Greece.

And neither of them required a bailout for weeks.

just need fear of "tanks on the streets" to set in.

bankers get paid, the tanks aren't needed as the population are too sore to walk without Preparation H.

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It's only €80bn bail-out, chicken feed.

These numbers are just so crazy... €80bn is €8k per man, woman, and child in Portugal or €25k per household. Minimum wage in Portugal works out to about €20 per working day, and most households have an income below €1k per month. Tax evasion in Portugal is maybe not quite as widespread as in Greece, but it is still very common.

There is no way the new debts being piled up on the PIIGS can ever be paid back. The only reason they are able to service the old debts is that they are about to be loaned a big pile of cash with which to pay the interest. Ponzilicious.

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These numbers are just so crazy... €80bn is €8k per man, woman, and child in Portugal or €25k per household. Minimum wage in Portugal works out to about €20 per working day, and most households have an income below €1k per month. Tax evasion in Portugal is maybe not quite as widespread as in Greece, but it is still very common.

There is no way the new debts being piled up on the PIIGS can ever be paid back. The only reason they are able to service the old debts is that they are about to be loaned a big pile of cash with which to pay the interest. Ponzilicious.

nice to see some perspective.

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William James and Jan Strupczewski, 12:37, Monday 10 January 2011
LONDON/BRUSSELS (
Reuters
) - The European Central Bank threw Portugal a temporary lifeline on Monday by buying up its bonds, traders said, as market and peer pressure mounted for Lisbon to seek an international bailout soon.

Bail out now underway. I wonder why they denied needing help, silly buggers.

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http://uk.finance.yahoo.com/news/Portugal-Battles-Growing-skynews-2103701661.html?x=0

Sky News 2011, 15:43, Monday 10 January 2011

Portugal is resisting pressure to become the next eurozone nation forced into a massive financial bailout.

Perhaps worryingly for the Portuguese people, the noises out of Lisbon match those Ireland (Berlin: IIK.BE - news) made in the days leading up to its own European Union/International Monetary Fund bailout worth £72bn.

But there is a growing belief that Portugal may also have to climb down in its opposition to a rescue package, which some commentators estimate could reach £66bn.

The country witnessed a general strike back in November (Berlin: NBXB.BE - news) amid a public backlash against government spending cuts.

Under any deal, Britain is committed to making a contribution. :o

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These numbers are just so crazy... €80bn is €8k per man, woman, and child in Portugal or €25k per household. Minimum wage in Portugal works out to about €20 per working day, and most households have an income below €1k per month. Tax evasion in Portugal is maybe not quite as widespread as in Greece, but it is still very common.

There is no way the new debts being piled up on the PIIGS can ever be paid back. The only reason they are able to service the old debts is that they are about to be loaned a big pile of cash with which to pay the interest. Ponzilicious.

An old Portuguese colleague of mine told me that his wife (who worked for their equivalent of the Inland Revenue), received what amounted to an honesty bonus every year. He said she could have made a small fortune over the years if she wanted to, accepting the odd back hander. When I informed him that tax collectors in the UK were expected to be honest as part of their job, he was astonished. I don't believe tax avoidance is as big in Portugal as it is in Greece, but I recon it's still an issue.

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Would now be an appropriate juncture to give this another airing?

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=alKHkqRaNsqw

March 18 (Bloomberg) -- Portugal sold bonds in dollars for the first time since November as part of a plan to issue 25 percent more debt this year to fund its budget deficit.

The nation priced $1.25 billion of five-year bonds at a yield of 97 basis points over the benchmark swap rate, according to data compiled by Bloomberg. The size was increased from $1 billion, while the spread tightened from 100 basis points, or 1 percentage point. Orders exceeded $1.5 billion euros, according to Deutsche Bank AG, one of the sale managers.

Portugal plans to sell about 20 billion euros ($27 billion) of debt in 2010, the government said last month, up from 16 billion euros in 2009. The government, whose bonds tumbled as Greece’s fiscal crisis increased scrutiny of European economies, has pledged to reduce its budget gap of 9.3 percent of gross domestic product by more than half in three years.

“It’s not surprising that Portugal is coming to the market now as many European sovereigns tend to borrow more in the first half of the year,” said Ciaran O’Hagan, a fixed-income strategist at Societe Generale SA in Paris. “Portugal will likely achieve a better rate of funding in dollars so both the government and taxpayers are getting a better deal.”

The spread on the new bonds gives an overall yield of 3.615 percent, according to Bloomberg data. That compares with the 3.34 percent yield offered by Portugal’s benchmark five-year issue in euros.

Cheap for Portugal

The pricing of the bonds was attractive for Portugal, which should be paying about 125 basis points over swaps for five-year money, according to an estimate by London-based UniCredit SpA analyst Chiara Cremonesi.

By issuing in dollars, European governments can reduce the cost of euro-denominated interest payments, as measured by the five-year euro basis swap. The basis swap is at 20 basis points less than the euro interbank offered rate, compared with 15 basis points less than Euribor in January, according to Bloomberg data.

Relative funding costs compared with a euro-denominated bond sale were “favorable,” Alberto Soares, chairman of Portugal’s government debt agency in Lisbon, said before the sale was completed.

“It’s been our plan to issue foreign-currency bonds, and it’s just a matter of identifying the window of opportunity,” Soares said. “We may consider issuing bonds in other currencies, but there’s no concrete plan on that for now.”

U.K. investors bought the largest portion of the bonds sold today, taking 33 percent, Deutsche Bank said. Asian investors purchased almost 20 percent of the securities.

Crisis in Europe

Portugal is one of the southern European countries whose markets were roiled by concern Greece would fail to finance a budget gap of 12.7 percent of GDP, the region’s largest. A European Union bailout for Greece was said to be in jeopardy today as Prime Minister George Papandreou called on his peers to set up an emergency financial-aid mechanism, and after German officials raised the prospect the country may have to turn to the International Monetary Fund.

Portugal’s benchmark 10-year bond dropped during the worst of the Greek debt crisis, pushing the yield to as high as 4.69 percent on Feb. 16, against 4.26 percent now.

Portugal last sold dollar debt in November when it raised $100 million from floating-rate notes due in 2014, Bloomberg data show. The country has $453 million of dollar-denominated securities outstanding.

‘Cost-Saving Benefit’

“The sale of dollar bonds offers Portugal some cost saving benefit and a new investor base,” said David Keeble, head of fixed-income strategy at Credit Agricole CIB.

The cost of insuring Portugal’s debt from default rose as the country sought to issue more bonds. Credit-default swaps on the nation climbed 8 basis points to a two-week high of 123, according to CMA DataVision prices.

Credit-default swaps are derivatives used to hedge against or speculate on countries’ or companies’ creditworthiness. The contracts pay the buyer face value in exchange for the underlying securities or the cash equivalent if a borrower fails to adhere to its debt commitments.

Deutsche Bank, Goldman Sachs Group Inc., HSBC Holdings Plc and Morgan Stanley are managing the sale of bonds, the banker familiar with the terms said.

Anyone want to remind me what that little lot's worth in today's money?

If you know you're going down anyway, you may as well make on the spread.

:lol::lol::lol::lol::lol::lol:

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Every time I see news about Portugal it reminds me of this one:

As head of the Portuguese Chamber of Commerce in London, Christina has a good grasp of the country's economy and is upbeat about the prospects for her property.

Even if Portugal left the euro and returned to using the escudo, she believes the impact would not necessarily be negative - and might even increase property prices.

Now would be a bad time to sell, she believes, as many properties have gone on sale because 'people have taken fright' at the country's financial malaise. But if she was offered 320,000 euros (£266,000), she would probably sell and reinvest in Britain. Christina says: 'I'm confident that if I sit on it for a year or 18 months, I will be OK because then I will have more than one buyer to choose from.'

http://www.dailymail.co.uk/money/article-1337826/Should-holiday-home-owners-stay-PIGS-storm.html

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  • 311 Brexit, House prices and Summer 2020

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