While former-Prime Minister Pedro Passos continues to infect the media with his increasingly bizarre allegations about the socialist party and its intent to trigger a second bailout, ratings agency Moody today said that the risk of such a bailout is low.
The position of Moody's on the need for a second bailout comes after Finance Minister Mario Centeno assured investors and the European Commission that his "primary task" is to avoid a second rescue.
Moody's has highlighted the current "comfortable funding position" in Portugal's national accounts, despite admitting that the risk of a further bailout "can not be completely ruled out."
PSD leader Pedro Passos Coelho said he believed that a new financial rescue could only be a result of a deliberate act by the socialist government, not a result of its incompetence or naivety.
At the close of the PSD Parliamentary talks today in Coimbra, the former prime minister also criticized the gap between the socialist government’s rhetoric and the economic reality facing the country.
Moody’s is altogether more optimistic, despite rating Portuguese debt as junk, stating today that "Despite the concerns already voiced in relation to the fiscal framework, we expect that the Portuguese government can bring the deficit below 3% and stabilise it within these levels."
Moody’s also noted that Portugal’s performance is well above that of several other struggling European countries in the eurozone despite not believing the country will hit the 3% figure this year.
During today’s PSD discussion, the panel on Economic Development and Attraction of Investment argued that the previous Government programme "took care of the poor," according to former Minister of the Economy, Daniel Bessa, who noted that the minimum wage had not gone down during the Passos Coelho years of austerity.
Comments
Portugal's weakening economy and increasing risks to the debt trajectory are exerting downward pressure on the country's sovereign creditworthiness.
Which in layman's terms makes the small print about bail outs more clear. Bailing out Portugal, with its unsustainable public debt is a no-brainer as any money put in would never be returned.. Re-read the FT's last write up ! See why the decision, of crashing Portugal - not bailing it out, has already been decided.