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Ratings agencies having 'an increasingly hard time' keeping Portugal at 'junk' level

moodysThe Assistant Secretary of State for Finance, Mourinho Félix, has been strutting his stuff in the US and persuading CNBC television viewers that Portugal is doing well and the rating agencies are having an increasingly hard time justifying their 'junk' ratings for Portugal.

"I would say that the three credit rating agencies (who attribute a junk rating to Portugal) will find it increasingly difficult to explain how and why they maintained this rating for an extended period of time, when Portugal in 2017 is very different to Portugal in 2014," said Mourinho Félix.

The secretary of state was at the IMF spring meeting in Washington on the eve of the Canadian agency DBRS looking again at the rating it has given Portugal.

It should be noted that DBRS is the only one of the four key rating agencies that has given Portugal an investment rating, unlike Moody's (which is reassessing Portugal on May 5th), Fitch and Standard and Poor's which all have Portugal registered as 'junk', which increases the country’s borrowing costs.

Despite this, Mourinho Félix  believes that the agencies are "increasingly understanding" the credibility and progress of the Portuguese economy, arguing that political stability and fiscal consolidation are no longer a problem.

"The problems pointed out now are banks and their non-performing loans," said Félix, pointing to the recapitalisation of Caixa Geral de Depósitos as an example of the problems being "almost solved," but not pointing out the massive cost to the taxpayer of keeping this ‘lame duck’ State-owned topped up with money.

On Tuesday, the IMF released its World Economic Outlook, in which it improves the projections for the Portuguese economy for 2017, now anticipating a growth of 1.7%, above the previously expected 1.1%, but slightly below the government estimate of 1.8%.

In the CNBC interview, the secretary of state was asked about the controversial statements made by the President of the Eurogroup, and replied that "time will take care of Jeroen Dijsselbloem".

At the end of March, Dijsselbloem told the Frankfurter Zeitung newspaper that "one can not spend all the money on drinks and women and then ask for help," referring to the southern European countries in comments that led to sharp criticism from Lisbon.

"Portugal and the Portuguese government maintain all that has been said since the moment Dijsselbloem expressed his wrong ideas and bad manners," said Mourinho Félix.

Comments  

-1 #4 Jeff Davis 2017-04-21 15:17
Portugal's parallel Universe becomes apparent in situations like this, when the fantasy bubble promoted by the Portuguese elite is briefly pierced by the reality of expert foreigners with inside knowledge. It doesn't help when, only a day or so ago the IMF rubbished Portuguese Banks for being very shaky with very little non EU investment activity. Due to distrust with Portuguese Banking Regulation or lack of it.

Interestingly all the French Presidential candidates have also been slamming France's vassal status to Germany. Whose economy underpin the whole euro pack of cards just when the US takes aim at the Germans. No wonder making the UK the whipping boy for this mess is so attractive to the less developed EU states.
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0 #3 TT 2017-04-21 09:13
Quoting CHARLY:
As in the past "figures from Portugal" were never correct and or accurate, today nobody has
confidence in this banana republic and definitely not the rating companies. Conclusion: it's Portugal's own fault they built up that very negative reputation.

Along with Spain, Italy & Greece. Dijsselbloem wasn't that far off the mark.
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+2 #2 dw 2017-04-21 09:03
The ratings agencies run a cartel which is a global scam. Their ratings are not based on accuracy, but self interest. The minister is playing their game as ever.
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+1 #1 CHARLY 2017-04-21 06:01
As in the past "figures from Portugal" were never correct and or accurate, today nobody has
confidence in this banana republic and definitely not the rating companies. Conclusion: it's Portugal's own fault they built up that very negative reputation.
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