The decision by Athens to force investors to give up part of their gains to cut sovereign debt by more than 100 billion euros has pleased the markets. It's hard to think of a reason why Portugal shouldn't be attracted to a similar solution. As much as the European authorities insist on the uniqueness of the Greek case, more and more voices insinuate that Lisbon too can follow Athens' path.
Bloomberg suggests it in an editorial in which it recalls that the Portuguese government, in order to keep its debt/GDP ratio stable, should achieve a 2% fiscal surplus: a result obtained only 3 times in the last 17 years. If Lisbon adopts a move similar to Greece's, by reducing its debt by 40% the surplus could easily stabilize at around 1% of GDP. Furthermore, the total amount of Portuguese debt is not even half that of Greece. “The markets seem to expect such a solution“, reads the article, “on Friday ten-year government bonds were traded at a discount of 47% compared to their market value”, a sign that investors are expecting a possible default at any moment.
According to data from CMA, a company that develops data on OTC markets and country risks, after ISDA defined the Greek case a “credit event” triggering CDS clauses on Greek debt, the Portugal moved to cover the first position in the ranking of countries where the risk of default is greatest, with a risk of 63,94%. In the top 10 are two other European economies: Ireland, in fifth place, and Spain in ninth.
Ma there is no need to fear a contagion effect with the other peripheral countries of the euro area. Again according to the financial journal for the'Ireland it would be enough for the European Central Bank (ECB) to lengthen the payment deadline for the 30 billion euro loan to the Irish central bank. The problem of Spain right now it is not debt and therefore does not need a Greek bailout. and also theItaly for now it seems to be managing on its own and above all it would require sacrifices from Europe that it could not afford. However to definitively avoid the domino effect, Bloomberg suggests that the ECB increase the value of the permanent bailout fund to at least 3 trillion euros: it is the only way to trust all of Europe.
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