Portugal’s Financial Situation Still Cloudy
Portugal, with its current financial situation, has requested for bail out. However, things remain cloudy as questions remain unanswered as to who will negotiate the terms of its request to bail out, how much the funds will be, and when the funds would arrive.
Shortly after the request for bail out, bank stocks that have suffered have led a rally at the Lisbon stock exchange overnight.
Portugal is run by a caretaker government ahead of a June election. This is making it even more difficult for foreign negotiators to determine who they will be dealing with in the next four years. More than that, Portugal is seen to enter a double-dip recession this year making it also hard for the nation to get out of the debt hole it is in. Trade unions also promised to have more demonstrations and rallies.
Cabinet Minister Pedro Silva Pereira said the country will send its formal bail out request on Thursday to European authorities. In response, a group from the European Commission and the European Central Bank will be arriving soon in Lisbon to discuss the financial assistance or rescue packages for Portugal. Analysts say it will be needing around 80 billion Euros which is around half of Portugal’s annual gross domestic product.
Portugal’s European partners have long been pressing the country to accept help. But Portugal took a long time to do it and so today there is so much obscurity since many aspects have also been mishandled.
Today, Portugal is considered to be one of eurozone’s poorest. It even has to repay 4.5 billion Euros by next week. Furthermore, it also has to acquire another 7 billion Euros to roll over a bond.
Around 340,000 Portuguese live on a minimum monthly wage of 485 before tax while 1.4 people take home less than 600 a month.
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Source: http://au.news.yahoo.com/thewest/business/a/-/world/9159600/portugals-financial-situation-still-tenuous/
