Just when you thought you were out, EuroZone debt worries pull the market back in
Today U.S. and EuroZone stocks and EuroZone bonds are down on a report that the parent company of Portugal’s Banco Espirito Santo, the country’s second largest lender, had missed a debt payment. Those reports have revived fears about growth and debt levels for Portugal and other troubled EuroZone countries
Italy might scrape through but euro debt politics get worse in Greece, Portugal, and Austria
The good news from Europe today is that the Italian government of Prime Minister Enrico Letta might be able to win a confidence vote scheduled, now, for Wednesday. The bad news is that the three other European governments—in Portugal, Greece, and Austria—have come down with their own case of wobbles.
Will Sunday’s German elections market a peak for the euro?
Post-election Greece looks like it’s going to need either a small bridge loan or a big bridge loan and debt reduction in late 2013 or early 2014. Portugal looms as an even bigger problem with the country needing to raise $15.8 billion euros ($21.4 billion)–meaning that Portugal will almost certainty need a second full bailout program at the end of 2013 or in early 2014.
Portuguese bond yields hit 8%; EuroZone shrugs
So far European—and global–financial markets are treating the political and economic crisis in Portugal as a Portuguese problem. Portuguese bond yields hit 8% but European stock markets dropped only 1.6% in Spain and less in Germany, France, and (surprise) Italy.
Selling the deal to bailout Portugal is the hard part
To finalize the $116 billion deal to rescue Portugal it has to win the approval of Portugal’s parliament and unanimous consent from the seventeen countries that make up the European Monetary Union.
Portugal is headed to a bailout–as soon as it gets a government
Yesterday, April 5, for the second time in three weeks, Moody’s downgraded Portugal’s long-term government bond ratings to Baa1 from A3. In response the bond market drove the price down and the yield up on Portugal’s government debt to a record 8.8%
Portugal’s government falls just before key EU meeting
With European Union leaders set to begin a two-day summit today, March 24, Portugal’s government has collapsed. Late Wednesday night Portugal’s parliament rejected a new budget austerity plan, prompting the resignation of Prime Minister Jose Socrates.