Portugal Seeks Financial Aid From European Union

This are going to turn for the worse in Portugal:

Portugal's prime minister said Wednesday his country has asked for financing assistance from the European Union due to its high debts and difficulty raising money on international markets.

More Here

Britain Faces £3bn Bill In Portugal Bailout

(c) Sky News 2011, 10:27, Thursday 7 April 2011

Britain could have to pledge more than £3bn towards an emergency European Union bailout requested by Portugal.

The country has became the latest to ask for emergency funds from Europe (Chicago Options: ^REURTRUSD - news) after the economies of Greece and Ireland (Berlin: IIK.BE - news) both collapsed.

It is estimated Portugal may need as much as 80 billion euros (£70bn).

That will come out of the current temporary EU bailout fund worth just over £50bn pounds, which Britain is committed to for the next two years.

Under the terms of the fund, Britain could be forced to pledge some £3bn in loans.

However, the Government said it would not be making a one-off payment as it did for Ireland.

Portugal has gone cap-in-hand to the European Commission after its austerity plans collapsed last month.

The country's caretaker prime minister Jose Socrates said his country was exposed to too much financial risk.

"I tried everything, but in conscience we have reached a moment when not taking this decision would imply risks that the country should not take," he said.

Debt-straddled Portugal has for months resisted increasing pressure to apply for help from the EU and the International Monetary Fund (IMF (Berlin: MXG1.BE - news) ).

But its borrowing costs reached unsustainable levels after the collapse of the government on March 23.

Portugal will have to agree to tough austerity targets to obtain a bailout, and it is unclear how quickly a deal can be agreed.

Mr Socrates resigned abruptly last month after he failed to get backing in parliament for his latest package of austerity measures.

His caretaker government has said it lacks the authority to negotiate a new economic programme.

A general election is to be held in Portugal on June 5.

Sky News political correspondent Sophy Ridge said: "In some ways the markets were already expecting Portugal to need a bailout.

"It may not have the same effect as countries such as Greece and Ireland when they were bailed out.

"This actually helps the coalition Government to justify the tough austerity measures that it's taking.

"The reason Portugal is in this situation is the government voted down the very tough savings that needed to be made."

Over the border in Spain, the government played down fears it would also need support, saying its economy was in a much better position.

Minister Elena Salgado said: "(The risk of contagion) is absolutely ruled out.

"It has been some time since the markets have known that our economy is much more competitive."

Eurozone officials have said Lisbon is likely to need between 60bn euros (£52.6bn) and 80bn euros (£70.2bn) in EU and IMF loans over the next three years.

The European Commission's top economic official, Olli Rehn, said a bailout was in the interest of the 17-nation single currency zone.

Osborne: Eurozone crisis shows dangers for UK

2 hours 27 mins ago
ITN

The eurozone's sovereign debt crisis highlights the dangers facing Britain if it fails to cut its record peacetime budget deficit, Chancellor George Osborne has claimed.

In a speech on Thursday morning, he said that the problems faced by Greece, Portugal and Ireland show what can happen if a country is thought to be unable to repay its debts.

"If you hear the stories about the cuts and still wonder why our country needs to take these difficult decisions, then look at what is happening around us. First Greece, then Ireland, today Portugal," Osborne told the British Chambers of Commerce, a business lobby group.

Britain's economy is recovering, but the process will be choppy, he added.

Isakenaz wrote:"Britain's economy is recovering, but the process will be choppy, he added."

Yeah, right; I just saw some pigs flying outside my window. There's no recovery in sight for Britain. There's no basis for recovery. Trust a politician to always dress up the distressing truth.

Back in '75, West German chancellor Helmust Schmidt contended that Britain was no longer a developed country. If anything, it has slid much further down in the last 36 years. It is a third-world country surviving on services (entertainment, speculative finance, arms trading), and pretending to be a first-world country. In other words, there is much in common between Britain and Club Med (Greece, Portugal, etc.)

Very good article regarding the situation in Portugal, in english. What they don't tell is who is gaining with these "crisis" and why we would be off better in control of our own currency:

Here

Leader of the Portuguese Communist Party "tells it like it is".

The secretary general of the PCP said today that the PS, PSD and CDS are preparing for an "unconditional surrender" to the EU and IMF and are warned that the Portuguese who rule the country "and not foreigners."

More Here

It would be good to express some form of solidarity with the PCP under these circumstances, but we would be as welcome to them as a fart in an enclosed space as they would to us.

Given the Orwellian nature of terms such as 'financial aid' -- as if the financial sector would help their own mothers much less anyone else -- it cannot be good. I assume that what is meant is that German, French and British banking and investment interests are slathering at the idea of getting some Portuguese peons? At any rate if they follow the general pattern cuts for the poor and working class will of course be needed to pay for the wealth flowing to the wealthy that engineered the crisis that justified the 'aid' and is the reason for the cuts. About right?