Portugal begins talks Bail-Out

18 April 2011 last updated at 14: 54 GMT Finance Minister Fernando Teixeira dos Santos leads the Portuguese delegation in talks Portugal euro ($115bn, £ 70bn) started with international authorities about the conditions of a Bail-Out, expected to be worth up to zurückgeschnitten talks.

Senior officials from Europe and the International Monetary Fund meet Portuguese Finance Minister Fernando Teixeira dos Santos in Lisbon.

Meanwhile denied Greece that a Bail-Out got in the last year, reports that its debts would have to restructure it.

Euro lost 1% of its value against the dollar as one of the reports.

It was trading at $1.4275. Against the pound, it was 0.7% to 87.78 pence.

Benchmark for Portugal and Greece reached the yields on government bonds also its highest level since the introduction of the euro of 1999 on concerns the European debt crisis.

"Greece in such a difficult situation that restructuring is inevitable, sooner rather than later", said Daniel Gros of the Central for European policy studies BBC world.

"Most earlier say would would be better than later, but the politicians do not agree, do they want to keep, as long as possible" he added.

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, that the Finnish Parliament has the right to vote at the request of the EU to other countries Bail-Out. The strong showing of the true Finns could potentially delay the rescue plan for Portugal. "

End quote Bank of Greece Governor George Provopoulos its debt - i.e. the conditions change - restructuring Gavin Hewitt was"neither necessary nor desirable"BBC Europe Editor."

The General Confederation of the Workers Union, the one million members, which said that it, the cost-cutting measures to protest would hold a strike on the 11.

And the European Commission denied there were talks about a possible restructuring of the Greek debt.

The nervousness spread market even after Spain, which, to borrow money for 12 months at an auction on Monday had to pay much higher interest rates.

The heavily indebted State, which is often spoken as the next State, a sovereign debt crisis could be facing a rate of 2.77%, up from 2.13% paid last month.

Finnish question

Officials have suggested that the conditions of Portugal's rescue deal agreed by mid-May.

It is to find a Bail-Out the third element of the euro within a year.

Greece received € 110bn in May last year, during the Irish Republic a Bail-Out at about 85bn euro in November were.

Read the most important story that two German EU delegations - Jürgen Kröger for the European Commission and Rasmus Rueff for the European Central Bank - lead while the IMF team is headed by Dane, Poul Thomsen.

However the true Finns can be the completion of the Portuguese Bail-Out more complicated by the strong showing last party in Finland. The true Finns are take advantage of and against the Bail-Out.

The European facility for financial stability, worth up to 440bn euros, financed by members of the eurozone and requires unanimous approval to be used.

An enemy of the Finnish Government could theoretically veto the package and, in contrast to other countries of the euro area, the Finnish Parliament can vote whether to approve the measures.

The European Commission tried to downplay this possibility in the light of the election campaign.

"We expect Finland fully to its obligations with regard to the involvement of Finland as the rest of the eurozone,", he said.

Watch: "It is almost a done deal," says Daniel Gros of the Centre for European policy studies

In the Finnish television, the true Finns, leader, Timo Soini, said: "The package, that is, I think it is."

Strict opposition

In Portugal, the main opposition party in the Transitional Government bid Bail-Out is secure, but many members of the public have been vocal in their opposition, the BBC's Alison Roberts reports.

"Is not clear how much can be more rigour imposed on results from the June elections, regardless of which Government," says our correspondent in Lisbon.

Workers in the public sector, which have already cut their wages plan to strike at the beginning of May. Also, there were widespread protests with young people in the last month about the lack of job opportunities.

The Government of José Sócrates collapsed last month - Bail-Out - request, because he does not pass package an ambitious austerity measures and privatization could get.

But some economists suggest that the IMF are on the interest rate and duration of the loan to EU officials, under pressure from voters in the Member States are, which put the money could take a softer line.

This is, since the IMF last week that Portugal forecast would GDP this year and continue to shrink.

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Mid may target for Portugal aid

8 April 2011, last updated at 15: 53 GMT see: Ollie Rehn says "we must you first funding gap'the define European Union seeks a bail-out for Portugal from middle may have sorted."

It means that the agreement on the introduction of new cost-cutting measures before the elections of 5 June be.

In a communication on an EU Finance Ministers in Hungary said Commissioner Olli Rehn, that they have to a bipartisan agreement.

He added that he expected the package Bail-Out that in the order of trimmed euro ($115bn, £ 70bn).

He also said that he convinced was that Portugal to refinance its own debts could is until an agreement could be concluded.

The formal request for the grant was from Portugal to 2200 CET (2000 GMT) on Thursday.

Ambitious programme

Commissioner Rehn said that the cost-cutting measures were defeated in the Portuguese Parliament a starting point for the reforms, which would have to be made to secure the aid package.

He also said that it would have to be an "ambitious privatisation programme" to reduce debt.

Read the main plot Alison Roberts BBC News, Lisbon

There the Socialist Government was the lack of a majority, which to his last savings package rejected, and led the Prime Minister's resignation. The Parliament has now dissolved was.

So, that a Bail-Out deal be credible, it the centre right Social Democrats, consent, currently in the polls leading.

Opposition leader Pedro Passos Coelho said, that he provide the bailout generally supported, however, that each package should be "minimal".

The party is keen to avoid that the hands tied so far before the election of 5 June; Ideally, it would now be agreed for only a part of the transaction. But it is doubtful that EU officials and Member States, which would accept.

In the General walks the favor Social Democrats spending cuts on tax, although she have ruled out a further increase in VAT from 23% do not.

But during privatisation and increase the value added tax and other taxes on the agenda could be normal voters could like to see aid package curb political patronage in public authorities, where appointed are persons from the two main parties as handsome profit seen at the expense of the taxpayers.

José Sócrates Government fell, because it passed the measures could get.

The BBC business editor Robert Peston understands, that the Bail-Out on a similar basis, provided the Irish Republic, one-third of it comes from EU funds that will help UK one-third of the euro area and a third from the International Monetary Fund.

Meet with the Minister of finance continue to Spain's Finance Minister stress that their country must not bailouts for.

Elena Salgado, said that "of course" Portugal would be the last country in the euro area, which requires a debt Bail-Out and added that Spain application was one out of the question.

Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) be a first step in the negotiations on a Bail-Out for the European Commission to send a joint mission to Portugal.

EU rules require such a mission in a country send questions for the financial help that make details of the help needed.

Portugal's costs for borrowing has risen so sharply, since entered the Socialist minority Government last month after his proposed more stringent cost-cutting measures in Parliament defeated.

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young people with talent are Portugal leave, because they can find jobs, where they can progress. "

End quote JEL writer of Portuguese Eurovision Song Contest entry different problems, the the ECB most wrote Thursday, it encourages Portugal seeking financial aid."

Portugal's problems were distinguished by Greece and the Irish Republic, the other countries, the rescue operations for needed have.

Weak economic growth and low productivity that the country fight, increase government spending to pay enough money through taxation resulted.

When the banking crisis came, it was to do with the same increasing cost of debt, which has had to deal with other countries, and finally had to admit that it can not, the money must increase it by the financial markets.

Ireland this burst had on the other hand, a much more severe banking crisis, mainly as a result of a property bubble.

Greece went on a debt fuelled shopping spree in the failure to sort, the public finances, to finance it.

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Portugal searches Bail-Out from the EU

6 April 2011 last updated at 21: 28 GMT José Socrates: "we have achieved in the moment where is it to much risk" Portugal's caretaker Prime Minister José Sócrates said that he has called for financial assistance from the European Union.

Socrates said that the country "on too much risk" was, it should be exposed to that is not.

The Government has long resisted for help ask but last week admitted to that it 2010 budget deficit target had missed his.

Portugal follows Greece and the Irish Republic in the search for a Bail-Out.

Mr Socrates said "I said always questions, would be the last way to go for foreign aid, but we have achieved at the moment,".

"Above all it is in the national interest."

President who Commission said José Manuel Barroso would be processing the request in a statement of Portugal "in the fastest manner in accordance with the rules in force".

He reiterated his "trust in Portugal the capacity, the current difficulties, to overcome with the solidarity of their partner".

Borrowing costs

Socrates not said how much help would be Portugal. Negotiations now are Robert Peston in progress and the BBC business editor rescue said as zurückgeschnitten euros ($115bn, £ 70bn) could make loans.

Socrates was speaking after Finance Minister Fernando Teixeira dos Santos said it was necessary for financial help from the EU.

Continue reading the main story of Matthew Preis Europe correspondent, BBC News

First Greece and Ireland, now Portugal. But unlike the previous two Bail-Outs, this one seems not to panic - either in the corridors, which makes here, nor have the markets provoked.

The EU top economic official Olli Rehn called the Portuguese decision a "responsible move". The President of the European Commission José Manuel Barroso - is Portuguese - said that the request can be processed as quickly as possible.

A team could be sent in the coming days after Portugal.

EU finance ministers hold a planned meeting in Hungary at the end of the week. Portugal will be high on the agenda.

The European Commission and the European Central Bank will both share the Bail-Out financing. The International Monetary Fund says it is ready, also help.

Earlier, the Government raised over EUR 1 billion to creditor pick a higher interest rate numbers on the financial markets to repay loans, but.

Portugal's costs for borrowing has risen so sharply, because the minority joined Socialist Government last month after his proposed more stringent cost-cutting measures in Parliament defeated.

Since then, several agencies of the country have downgraded debt.

An informal meeting of European Finance Ministers had already planned in Budapest for Thursday were. Portugal was not originally on the agenda but should be discussed.

The UK Treasury Minister Mark Hoban will take part. A source at the Treasury said that the bilateral loan UK the Irish Republic was offered "very much a special case" and is a similar offer "not on the table" for Portugal.

Jan Randolph, head of the country risk at IHS global insight, told the BBC, that Portugal could organize "a kind of bridging loan" in the short term.

But he added: "the real big loans over several years need a medium-term plan and I don't think that can be agreed until the new Government in place."

Elections are expected to take place in a few months.

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Moody's downgrades Portugal again

5 April 2011, last updated at 08: 36 GMT cost-cutting measures to reduce the budget deficit proved deeply unpopular credit rating agency of Moody's has downgraded Portuguese public debt level by A3, Baa1, and warned that a further reduction may be required.

This is the second downgrade by Moody's in less than a month and follows fellow Agency standard & poor's cut last week.

Moody's "first and foremost through greater political, financial and economic uncertainty was driven" said his decision.

Make the move increases, the Portugal is forced, questions its European partners for a financial Bail-Out.

Last week, which had granted the Portuguese Government, it missed its budget deficit target for 2010.

A total was 8.6% of the economic performance of the European Union target of 7.3%.

Moody's said that the increased uncertainty in the country increases the risk that "the Government unable to achieve [its] targets ambitious deficit will in the next three years".

Is the Portuguese government debt rose slightly after downgrading to 8.54% of 8.47% on Monday, which raised concerns about his ability, his debt to pay back.

Are these high rates as not up to unsustainable in the long term.

Portugal has not yet called no financial support, but many analysts believe it is only a matter of time before it is forced to do so, as the country economic situation worsens and increases the cost of borrowing in the markets.

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Portugal misses bond target

March 31, 2011 last updated at 20: 00 GMT losses nationalised bank BNP had admitted in the public deficit, according to European rules which has Portuguese Government, is missing that 2010 budget deficit target will be included.

A total was 8.6% of economic output, about 7.3% of the EU target. Lisbon blame the inclusion of losses in State transport company and a bank.

Portugal's cost of borrowing has increased sharply as bond markets increasingly expect a debt default.

Fresh elections will be held on 5 June, which announced the Portuguese President. A vote of confidence was the minority Government last week after the loss.

Bail-Out delay

The Government short and medium term cost of borrowing has increased rapidly in the last few days as the prospect of a debt restructuring over the next two increasingly looks likely.

The return of the Portuguese two-year bonds hit 8.6% on Thursday - highest since Portugal joined the euro in 1999. The yield has increased and a half by 2.5 percentage points in the last week.

The five year cost of borrowing increased to 9.5%.

The caretaker Government - free of charge after the resignation of Prime Minister Jose Socrates last week until elections expected in may or early June - blame the revised deficit for accounting changes.

Continue reading the main budget deficit: 8.6% (2010) borrowing costs: 8.6% (two year bonds) growth: 1.2% inflation (2010): 3.5% (Feb 2011) unemployment: 11.1% (Dec 2010)

Data source: Bloomberg

Around EUR 1.8 billion ($2 billion, £ 1 billion) in losses at nationalised bank BNP were added, the deficit after a visit to the Ministry of finance by Eurostat, the Statistical Office charged with strict rules for Governments that set financial accounting.

The 8.6% level an improvement on the 10% deficit is recorded yet in 2009.

The Government said that it was targeted still a deficit of only 4.6% for the current year.

Meanwhile said the Finance Minister, Fernando Teixeira dos Santos, that the Transitional Government request not the legal authority to a financial rescue package by the European Union and the International Monetary Fund.

However, he said, they expected, took office - some of this summer "the necessary financing conditions" until a new Government.

Inflation vice

Portugal has been put in an even tighter spot by rising inflation.

On Thursday, it was revealed that this inflation increased to 2.6% in the euro area as a whole, consumer prices.

Inflation at 3.5% is in Portugal.

Not only is this put pressure on household finances, but is also the prospect of an imminent interest rate rise by the European Central Bank.

Market expectations of higher interest rates have added also the increase in Portugal's borrowing costs.

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Portugal crisis cloud EU Summit

24 March 2011 last updated at 16: 57 GMT the Portuguese Prime Minister warned "very serious consequences" EU leaders are grappling with the a new threat with eurozone after Portugal of Parliament rejected an austerity budget and PM José of Sócrates resigned.

The vote means an international Bail-Out, similar to that of Greece and the Irish Republic in the last year is now accepted far more likely.

Socrates said opposition parties "by the Government the conditions to govern had removed".

EU Summit in Brussels aimed at combating the eurozone debt crisis.

Pressure

Although the situation in Libya and the recent events in Tunisia and Egypt are high on the agenda, the Summit has the moment been billed, which adopted a "comprehensive package" stabilisation of the euro-zone EU-27.

As part of the deal would the lending capacity of the European financial stability facility (EFSF) of 250bn euro (£ 218bn; $354bn) euro increase on 440bn. The EFSF will be replaced by a permanent European stability mechanism in 2013.

But EU governments their national contributions to the augmented have nailed not yet down, EFSF and Portugal's uncertain that policy hampered unanimity.

Pressure on Portugal economy more on Thursday as the interest of the country's ten-year bonds rose to a new high of 7.6%.

Portugal faces bond repayments of 4.3bn euro on 15 April and in a national address on Wednesday night, Socrates warned that the political crisis would have "Very serious consequences for the trust must to enjoy Portugal institutions and financial markets".

The rating agency Fitch downgraded Portugal's sovereign credit rating from A + to A - on Thursday.

Belgian police drove ahead of the Summit, again a group of demonstrators with water cannon and tear gas close to the venue, while thousands of other people peacefully protested against severe cuts.

'Brave'

Belgian Finance Minister Didier Reynders said that Portugal partners were ready to help, if desired.

Read the main current lending capacity of 250bn 440bn euros euro in the European financial stability facility (EFSF) permanent European stability mechanism (ESM) to be launched in 2013 with 500bn-euro loans of CapacityCountries arguing about their contributions "I always thought that it would be useful", Help organize raised werdeneinfach because the [Portugal allows] pay it on his debt to the undergoing restructuring, less interest and therefore make less, sometimes stressful ones, calls on [his] people, "he said on Thursday in Brussels."

"If Portugal asks, we to intervene." "For this to happen it must a plan to his finances back to better health and a request to the European Fund unlock will bring."

A Bail-Out for Portugal of zurückgeschnitten euro as a whole could, analysts say.

In a speech of the German Parliament (Bundestag) on Wednesday, German Chancellor Angela Merkel said it "regrettable" was that Portuguese had rejected members collecting Government proposed package of spending cuts and tax is.

Mr Sokrates praised efforts as "courageous", Mrs Merkel said: "what we need is a consistent path of consolidation and reform." "Has shown yesterday, how difficult this is."

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the history of this [Libya] crisis is that individual leaders have been, during the EU fight, to your voice "

end quote Gavin Hewitt BBC Europe caretaker role all five Portuguese opposition parties rejected austerity measures - the Government fourth set of proposals in a year, argue they went too far."

Although he stepped down on Wednesday, Socrates, the Summit is visited as a caretaker Prime Minister. A snap election is today, but the decision will be made by Portuguese President Anibal Cavaco Silva.

Lisbon has argued that his situation of Greece and the Irish Republic - different both have agreed to Bail-Outs of the European Union and the International Monetary Fund.

It says that its are lower than those Nations, deficit and debt, that it has suffered no bubble in the real estate prices and the banks are sound.

Arrival at the Summit on Thursday the new Irish Prime Minister, Enda Kenny, said he would on the results of stress tests on Irish banks waits before renegotiation of the conditions of the 85bn euro granted Bail-Out to Dublin in December. The results are expected on 31 March.

Dublin EU IMF requested help after pouring billions of euros in indebted Irish banks, but it will reduce the interest rate on the Bail-Out.

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Portugal receives debt downgrade

16 March 2011, last updated at 08: 26 GMT ratings downgrade will likely make it more expensive for the Portuguese, to borrow money, Moody's has rating Portugal's sovereign debt, citing the country's need, debt and poor growth prospects cut downgraded.

The credit rating agency cut by two notches from A1, A3 Portugal and gave the rating on a negative Outlook, which follow on further downgrades.

Meanwhile, Portugal's opposition party has announced it is strict against the plans of the Government.

The Prime Minister has warned that the country could be a Bail-Out.

"The result of a political crisis would worsen the risks for our economy and to the intervention lead," he said.

Portugal is loaded with high levels of debt and is fighting for an international Bail-Out, to avoid similar as those of Greece and Ireland.

Political deadlock

Prime Minister José Socrates was the latest in a series of cost-cutting measures Government last Friday.

The plans, the cuts to the health and welfare budget, meant investors and EU colleagues say, that it can meet its debt obligations without outside help.

However, the austerity package is met with fierce opposition, and the Prime Minister has warned that the measures win does not support, his country in a Bail-Out can be forced.

The main opposition party has now decided, could formally oppose the plans, lead the political impasse.

This could force the current minority Government overthrow general elections.

"I have fought to prevent this scenario for six months," Mr Socrates said Portuguese television.

Negative outlook

Despite Moody's two notch downgrade, the Agency remains still prices Portugal as "investment grade" and the country several notches above the more risky "speculative grade" ratings, which has occurred after Greece.

Moody's said "the costs of financing market is likely remain high until the deficit has been reduced to sustainable levels and the Outlook for economic growth have improved" in a statement.

Portugal on Wednesday sold 1 billion euro worth of 12-month Treasury bills at an auction.

The return of the debt was seen in a previous sale to the March 2 4.331% from 4.057% but below the record level in December.

Investor demand was also less than at the last auction and earlier this month.

Downgrade is likely to, nor more expensive for Portugal money on international markets to increase.

The country's ten-year cost of borrowing hit a new high of nearly 8% last week, and has more than 7.5% since remained.

Moody's has given a negative Outlook on the new rating, which means that the rating could be downgraded further.

This indicates that Moody's, is not sure that the Portuguese Government on the reforms provide it announced recently.

Standard and poor's, one other credit rating agency, recently announced that debt it also Portugal's A - rating - equivalent to A3 checks Moody's rating - for a possible downgrade.

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