Economist Intelligence Unit: Portugal won’t escape a “haircut”
Portugal will not be creditworthy without restructuring its debt, and is bound to require more help from its international creditors, the Economist Intelligence Unit (EIU) claims in a document.
Portugal will not be creditworthy without restructuring its debt, and is bound to require more help from its international creditors, the Economist Intelligence Unit (EIU) claims in a document that financial daily Diário Económico had access to.
The newspaper also reported that a recession of 2.2% expected for next year would hinder the consolidation measures agreed with the EU-ECB-IMF troika.
If Portugal isn’t considered able to finance itself alone in the markets from September 2013, we believe a second financial rescue will be required,” the EIU team said, according to Diário Económico.
The possibility of the troika lending the country more money is plausible but it does not guarantee public debt solvency, the paper reports.
Last week the Portuguese government announced a “huge” tax spike in the 2013 draft budget which economists say will have devastating effects on the economy, referring to the measures as “shocking” and “optimistic.”
As described by the Economist in a piece about Portugal’s austerity, the country is likely to be subjected to a “dictatorship of debt” and “condemned to depend on its official creditors indefinitely.”
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Mattus
So, how exactly does this work, Portugal is forced to take on more austerity with strict restrictions, which the government will then use to legitimize more taxes, which in turn will shrink the economy even further, which will force another round of rescue funds, with restrictions, consolidated once again with more taxes, shrinking the economy even more, until at the very end, perhaps somewhere between now at 2020, all income earned by the Portuguese will go straight into the hands of government. In turn for this robber, Portugal will see its natural resources given away to Multi-nationals, much in the way it is happening now, where oil exploration is being granted. Oil company’s off of the Algarve are being allowed to destroy the environment, in turn, Portuguese government gets a paltry 25 cents per barrel (which at current market prices is about 90 U.S dollars). Yes, very intelligent indeed. So, while Iceland votes to ban external exploitation of its resources, Portugal gives it away. While Iceland gets responsible government, Portugal gets big brother government. This country is run worse than Angola, at least there, they have enough sense to exploit their own resources. The country is run by a bunch of bribe taking scumbags, the people need to wake up.