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Friday, November 26, 2010

Of Course They're Not Pushing. Really.

The Financial Times Deutschland is reporting that several member nations of the European Union are now pushing Portugal to seek a bailout loan. (I'd have provided a link to the original article, but when I went looking for it I discovered that what German I can read has atrophied to the point that I could barely pick out one word in twelve.) This makes perfect sense, since Portugal is one of the PIIGS.

Of course, as we saw just two days ago, Portugal is denying this. They're insisting that they don't need help and all they need to do is enact some austerity measures to ensure that their budget remains solvent. "There is no reason for us to trigger any mechanism," is the official word from the Portuguese Ministry of Finance. There's been no political discussions about triggering any mechanism. We don't know how many times we have to say this, as a government, to stop all this inaccurate speculation."

No, wait. I'm wrong. That quote came from the Irish Minister of State for European Affairs, Dick Roche, on November 15. The Portuguese quote, from 11/21, states: "Once again I recall that Portugal is equipped with a banking system that is modern, sophisticated, well regulated and supervised, resilient and strongly capitalised."

Despite official declarations from Portugal and the EU that all is well, the markets are demanding increasing premiums for buying Portuguese sovereign debt.

"EU denies pushing Portugal towards bailout"

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