Portugal News, in English

[Vasconcelos]

This topic is meant for news either of the country, of directly affecting it. Everyone is invited to post and discuss whatever they see fit.
News of exceptional relevance may be given their own topic.






China Is 'Available' to Support Portugal Through Financial Crisis, Hu Says.


China said it’s “available” to support Portugal’s efforts to come through the economic crisis that has prompted its borrowing costs to spiral this year.

“We are available to support, through concrete measures, Portuguese efforts to face the impacts caused by the international financial crisis, and deepen and broaden our economic and commercial cooperation,” Chinese President Hu Jintao said in Lisbon yesterday.

He didn’t specify what such measures might be. The Chinese president yesterday ended a two-day visit to Portugal and did not mention Portuguese bonds or debt in public comments.

The extra yield investors demand to hold Portuguese debt rather than German bunds widened last week even after the minority government on Nov. 3 passed a budget plan that features wage and spending reductions to trim the euro region’s fourth- largest deficit from 9.3 percent of 2009 gross domestic product.

China “has always given positive and favorable consideration” to bond purchases when making state visits, Vice Foreign Minister Fu Ying said on Oct. 28.

Portuguese Economy Minister Jose Vieira da Silva on Nov. 6 said that the existence of institutions and countries that are interested in diversifying their portfolio with Portugal’s bonds is “a positive factor.”

“If we are able to place that debt with a logic of greater diversification and greater equilibrium among the various financial agents, that is a factor of greater security not only for the placement of that debt, but also for its management,” Vieira da Silva said.

Bond Sales

Portugal plans to sell as much as 1.25 billion euros ($1.75 billion) of bonds due 2016 and 2020 on Nov. 10. The yield at a Nov. 3 auction of 1.03 billion euros of three- and 12-month bills climbed and demand declined for the securities. Portugal paid 3.26 percent for the 12-month debt, up from 2.886 percent on Oct. 6.

The spread on Portugal’s 10-year bonds over German bunds was at 410 basis points on Nov. 5. The spread soared to a euro- era record of 441 basis points on Sept. 28. German calls for bondholders to share the burden of any future debt restructuring have also made investors wary of lending to Europe’s most- indebted nations.

Portugal’s planned spending cuts for next year are set to be the biggest since at least 1978, according to EU statistics office Eurostat, as the government tries to convince investors it can narrow its budget deficit and curb debt. The austerity measures may hurt Portugal’s economic growth, which has averaged less than 1 percent a year in the past decade.

Exports

The government is counting on exports such as paper and wood products to support growth. The budget forecasts economic growth of 0.2 percent next year, slower than this year’s estimated 1.3 percent pace.

“The Chinese government encourages competitive companies to invest and operate in Portugal, and we welcome Portuguese companies to participate energetically in the competition in the Chinese market,” Hu said yesterday. “We will do everything so that trade between China and Portugal can double by 2015.”

Portugal’s budget gap last year was the highest in the euro region after Ireland, Greece and Spain. It aims to lower the shortfall to 7.3 percent this year, 4.6 percent in 2011 and meet the EU’s 3 percent limit in 2012.

The Finance Ministry forecasts Portugal’s public debt as percentage of GDP will increase to 86.6 percent in 2011 from about 82.1 percent this year. Finance Minister Fernando Teixeira dos Santos said on Oct. 16 that he expects the ratio to “stabilize” in 2012 and to start declining in 2013.

Portugal’s budget plan calls for lowering the wage bill 5 percent for public-sector workers earning more than 1,500 euros a month, freezing public hiring and raising the value-added tax by 2 percentage points to 23 percent. The governing Socialists have agreed to reconsider some public-works projects including public-private partnerships to overcome the opposition of the Social Democratic Party to the budget.
Source http://www.bloomberg.com/news/2010-11-08/china-is-available-to-support-portugal-through-financial-crisis-hu-says.html

[Vasconcelos]

The European bond market was under serious strain Wednesday as yields on Portuguese and Irish debt soared to record levels in the face of mounting investor unease over shaky public finances.

Portugal and Ireland, along with eurozone partner Greece, are struggling with burgeoning public debt and deficit levels and as a result have had to pay ever higher returns to bond buyers to meet their obligations.

The spectre of the debt crisis in Greece, which put the eurozone under huge financial and political strain earlier this year, still stalks the markets.

On Wednesday the Portuguese public debt agency, the IGCP, raised 1.242 billion euros (1.7 billion dollars) through the issue of six- and 10-year bonds in an operation that had been expected to raise 750 million to 1.25 billion euros.

The Portuguese auction was the first since parliament in Lisbon earlier this month approved a rigorous austerity budget for next year.

Although the government managed to meet its financial targets in the operation, success came with a cost. The 10-year bond carried a yield of 6.806 percent compared with 6.242 percent at a similar operation on September 22.

The yield on the six-year bond came to 6.156 percent against 4.371 percent in late August.

Wednesday's yields were the highest Portugal has had to pay since the eurozone was established 11 years ago.

"Investor appetite for Portuguese debt has clearly weakened," said Filipe Silva, a bond strategist with Banco Carregosa.

He noted that demand for the 10-year bond was half as strong as it was on September 22.

In late Wednesday trade, the benchmark Portuguese 10-year bond was at 6.908 percent, up sharply from 6.577 percent late Tuesday.

The government said on Monday that it had met 93 percent of its 2010 financing needs and that Wednesday's bond auction would be the last this year.

Portuguese Finance Minister Fernando Teixeira dos Santos said investor jitters "are basically linked to uncertainties regarding the form that a future European mechanism to manage (financial) crises will take."

But he stressed that his administration was making efforts to reduce the public deficit to 4.6 percent of output from 7.3 percent this year.

The government last week ruled out an appeal to the International Monetary Fund or the European Union for assistance, which has been made available to help Greece out of its financial hole.

Parliament last week approved a severe austerity budget that on Saturday drew tens of thousands of government workers into the streets to protest salary cuts.

The yield on 10-year Irish paper meanwhile jumped at one point Wednesday to 8.623 percent, its highest level since the creation of the eurozone in 1999, reflecting investor fears that parliament might reject a 2011 budget that calls for spending cuts of 6.0 billion euros.

The yield later fell back to 8.295 percent.

Looming in the background are the economic troubles of fellow EU member Greece.

In May, the EU and International Monetary Fund cobbled a 110-billion-euro (140-billion-dollar) rescue package for debt-strapped Athens after markets turned against it, demanding exorbitant returns for buying its government debt.

Faced with paying more in interest than it could ever hope to repay, Greece turned to the EU and IMF for help and the two later agreed on a larger back-stop rescue mechanism for other eurozone members.

On Tuesday, Greece raised 390 million euros (544 million dollars) in a sale of six-month treasury bills but -- like Portugal -- had to offer steeper terms to attract investors.

The yield offered was 4.82 percent, compared to 4.54 percent for an equivalent treasury bill issue worth 900 million euros a month earlier.

Greek 10-year bonds were yielding 11.449 percent in late trade.

source: http://www.google.com/hostednews/afp/article/ALeqM5hEmvh2glhBMVP1blKMCH41_OVznw?docId=CNG.343e5 41c0c6b010ffdd4b15c71b3040d.811

[Vasconcelos]

EU dismisses ‘speculation’ on bailout need.


The European Commission dismissed as mere “speculation” Friday the eventuality of Portugal having to request EU bailout aid.

“There have been no contacts in this sense”, Brussels’ spokesman for economic affairs Amadeu Altafaj Tardio told Lusa News Agency.

Mr. Tardio said the Portuguese parliament’s approval last week of a 2011 austerity budget was “an important development, the best possible to strengthen the credibility of the Portuguese economy” before the markets.

He declined to comment on the fact interest on Portuguese sovereign debt had risen to nearly 7% since parliament passed the budget, saying Brussels did not comment on short-term market developments.

In a similar vein, former IMF Director-General Jacques de Larosière said in Lisbon he was favourably “impressed” with the budget’s belt-tightening measures.

He said the “very significant” steps would allow the government to reduce the deficit next year to 4.6%, as planned.

“Portugal is doing its work very well; it’s doing the right things”, Larosière said, adding that the IMF “wouldn’t do much more”.

http://www.theportugalnews.com/cgi-bin/article.pl?id=1087-28

[Oinakos Growion]

Well, the news that East-Timor (!) is willing to buy some Portuguese debt made me think a lot this morning... :P

http://economia.publico.pt/Noticia/ramoshorta-timorleste-disponivel-para-comprar-divida-portuguesa_1466059

(sorry for the link in Portuguese, but anyways, that's the headline)

Will Portugal become the stable bridge into Europe (and Brazil) the Asians (namely China) always wanted to have?

[Vasconcelos]

Yes, I read that news aswell, pretty funny Timor wants to buy the debt, don't think they can help much, but sure it's better to have them buying it than China. It's a bit worrying to have the Chinese charging on the Portuguese economy and expanding their tentacles in Europe, most of the people dislike the idea of the Chinese getting an ever-increasing influence on the country, be it economically or otherwise.

[antonio]

Indeed I agree with you. China support and collaboration is not fair at all. What has China to offer to Portugal? Neither technology nor example. Technologically they're not even close to Taiwan, Corea or Japan. And what example can they constitute? Massive underpayed workforce, blatant corruption on provincial areas?

Pd. Once upon a time I invest some money thru the company employing a friend of mine. Since then my friend left company, the investment go mostly bad and nowadays is little money: i could take them off to my reference bank, but I keep them here because of company is now part of a Portuguese bank. It's my little support. Another it's to buy Portuguese food, although there's an absolute lack of reciprocity with Spanish one: for now, economical colonization of Portugal by Spain has caused little profit of former. Obviously we're like China, what we had to offer apart from real-state especulation? We really deserve a worse fate, maybe we're too big to fall, but indeed we deserve it big time.

[Vasconcelos]

LISBON, Nov 15 (Reuters) - Portugal must convince markets it is serious about executing the 2011 budget and make it a part of a credible strategy of fiscal discipline, European Central Bank governing council member Carlos Costa said on Monday.

Investor concerns about the ability of euro zone weaklings like Ireland and Portugal to tackle their large fiscal deficits and debt have driven their borrowing costs to euro lifetime highs this month, raising the spectre of a Greek-style bailout.

"The impact of the 2011 budget on market confidence will depend first of all on the demonstration of the will and ability for its effective execution," Costa, who is also Bank of Portugal governor, told a conference.

Ireland is under growing pressure to agree to a deal but Portugal's government has ruled out resorting to foreign aid for now, saying it will rely on austerity to slash the deficit amd meet a goal of 4.6 percent for the fiscal gap in 2011.

Costa said the draft 2011 budget was an "unprecedented" effort and its expected final approval later this month is key for investor confidence. But he reiterated that additional measures were needed to make public finances sustainable in the medium term.

Economists' concerns around Portugal centre around its poor growth outlook, undermined by a struggle for competitiveness since it joined the euro at what some say was an overinflated rate that undermined local business for the longer-term.

"The budgetary policy has to be accompanied by other policies of a structural nature that contribute to increase the growth potential of the Portuguese economy," he said.

The premium investors demand to hold Portuguese 10-year bonds rather than German Bunds fell about 10 basis points on Monday, continuing to retreat from last week's record level of 501 bps.

[Oinakos Growion]

http://news.oneindia.in/2010/11/18/portugal-beats-world-champion-spain-4-0.html

I had to post this... ;) It can't all be horrid economic news! :D

http://www.abola.pt/img/fotos/seleccao/2010/cristianoronaldoesp2.JPG

[Comte Arnau]

The best thing of the match was Ronaldo and Busquets getting mad with each other. A foretaste of next November 29... :D

[Heretik]

http://news.oneindia.in/2010/11/18/portugal-beats-world-champion-spain-4-0.html

I had to post this... ;) It can't all be horrid economic news! :D

http://www.abola.pt/img/fotos/seleccao/2010/cristianoronaldoesp2.JPG

:thumb001: :thumb001: :thumb001:

Good night Spain. :D

[Oinakos Growion]

The best thing of the match was Ronaldo and Busquets getting mad with each other. A foretaste of next November 29...
Although in this case I was with Ronaldo all the way... ;) He had the right shirt on :D

[Vasconcelos]

Ronaldo's "goal" was simply amazing, especially when you consider he was slightly injuried at the time. What a waste!
RSibXcefKMc

[Oinakos Growion]

Main news in Portuguese, but I'll translate a bit what's about:

http://publico.pt/Local/lojas-em-beja-usam-sapos-de-barro-para-afastar-ciganos_1467019

Shops in Beja display toad figures to scare off gypsies

"Toads/frogs are an evil image for gypsies, who associate this animal to back luck and unhappiness. In Beja - where many gypsy families live in the Pedreiras quarter - shops and houses display the figure of the animal"

So, basically, people are using frog images all around to let the gypsies know they're not welcomed.
If you go into the link above and check the picture in the article note that it says that the frog is at the doorstep of a "Chinese shop" :D nuff said...

[Vasconcelos]

rofl

I'll have to tell my gf's mother that, there are loads and loads of gypsies in her city (Entroncamento).

[Vasconcelos]

Portuguese students achieve record results in OECD’s PISA study


Portugal has made strong progress in education, approaching the average ranking in the OECD’s Programme for International Student Assessment (PISA) for the first time, according to a study released earlier this week.


The PISA 2009 report issued in Paris showed Portuguese 15-year-olds registering “impressive” gains over the previous study in 2006 in the key subjects of reading, mathematics and sciences, OECD director Andreas Schleicher told Lusa News Agency.

The Portuguese students received a classification of 489 points, just shy of the 493-point average among 470,000 students from 65 countries tested last year, the study showed.

The score placed Portugal alongside countries like the United States, Sweden, Germany, France, Ireland, Denmark, Great Britain and Hungary.

South Korea and Finland led the pack with 539 and 536 points, respectively.

“Portugal occupied the bottom of the pile in previous studies and this time neared the average for OECD countries, overtaking Spain, for example”, Schleicher said.

He attributed Lisbon’s eye-opening progress to “the policies followed in recent years and to a combination of factors, like the evaluation of teachers and serious control of the quality of teaching”.

In Lisbon, Education Minister Isabel Alçada welcomed the report as confirmation of “very significant” gains in Portugal’s educational system.

“Portugal has invested much in improving its schools and this is expressed in the results”, Alçada told Lusa, attributing the success “in the first place, to the work of teachers and their quality, investment and commitment”.


Source (http://www.lusa.pt/lusaweb/)