Record week for Portugal in which the latest wave of speculation is unleashed. 10-year government bonds achieved a yield of 14,7%, making the differential with the corresponding German bunds soar to 1.290 basis points: the highest level since euro entry. And this morning the air cannot be better: the spread reached 1.356 bp and the ten-year Bônus yields 15,41%. A further sign of weak confidence in the Portuguese state are the values of 5-year credit default swaps – derivative securities that act as insurance in the event of non-payment by the issuer. THE cds they have reached i 1.396 points, when the same derivatives for Germany are worth 87, for France 171 and for Italy 422.
Not only the financial system but also the real economy reflects the Portuguese difficult situation. With a public debt exceeding 90%, one is expected economy contracted by 3% in 2012. What the Lusitanian government fears the most, however, is the public deficit, which by law cannot exceed 4,5%, but Prime Minister Pedro Passos Coelho himself declared at the end of December that will exceed 5% if no additional measures are introduced.
It is therefore clear why this morning a pool of Reuters economists declared that there is a 70% chance that Portugal will ask for new international aid. The new center-right government has already obtained 78 billion from the EU and the IMF, shortly after the downgrade of the sovereign debt rating (which Standard & Poor's downgraded again a few weeks ago to junk), in exchange for reforms and objectives to be met in the next three years. Although Passos Coelho guaranteed this morning that "we will not ask for more money or more time", the 78 billion may not be enough, or at least not until 2014.
According to many experts, in 2013 Lisbon will certainly have to return to the market to obtain the 9 billion euros that expire in September next year. And as for Athens, the IMF could force a new bailout if it believes that the country is not yet ready to face the markets.
This is how the prophecies began in the newspapers, which risk feeding themselves and dragging the country into a negative vortex. Will Lisbon be the new Athens? But the crisis that is affecting Europe, and ours too Italy, is largely due to a lack of trust, which considerations of this kind only make worse.
And, if the serious situation on the markets is certainly a point that unites them, many have underlined the differences between the two countries. First i economic numbers which cannot be compared, because in absolute value the Greek problems weigh much more on the European budget. Also the political situation. The Portuguese have always shown greater trust in their parliament and have accepted periods of austerity, such as the one between 2004 and 2007, with a spirit of sacrifice and good will. If Athens takes to the streets, Lisbon rolls up its sleeves. And this could be the element that can make the difference.
