Yes, as previously discussed, the obvious political move is to demand the same discounts as Greece.

Especially with the pending Greek ‘restructure’ and ECB check writing to support the banking system seemingly making the euro stronger and not causing inflation.

And the ‘sustainability maths’ is just about the same for all of them as well, particularly given the current slowdown.

Once the markets realize the politics are moving in that direction, all euro member nation bonds again become suspect and the crisis enters the next stage, resulting in the ECB pretty much funding everything, one way or another.

It’s just a question of how it all gets from here to there.

Portugal Union Leader Wants Debt Renegotiation

By Axel Bugge and Daniel Alvarenga

Feb 7 (Reuters) — Portugal must renegotiate its debts rather than impose harsh austerity measures to overcome its economic crisis, the head of the country’s largest trade union said on Wednesday, threatening to step up strikes if the government pushed on with cuts.

Armenio Carlos, head of the CGTP union, told Reuters Portuguese workers would take a stand against attacks on labor rights, which he said were part of the government’s sweeping economic reforms promised under a 78 billion euro ($103.29 billion) bailout.

“What we defend is the renegotiation of debts, in terms of deadlines, in terms of interest and in terms of the amount,” Carlos said in an interview, adding that the country’s bailout had made it impossible to meet its obligations.

Portugal’s debt currently equals about 105 percent of gross domestic product.

“We are being confronted with a neo-liberal attack on workers’ rights,” he added, saying the government’s recent labor reform, making it easier to hire and fire, could spark a growing wave of protests.

The union leader, a former electrician and an ex-Communist lawmaker who took over as head of the CGTP a week ago, warned that with the austerity policies demanded by the bailout, Portugal was heading down the same road to ruin as Greece.

5 Responses

  1. Uh, our neo-liberal Prime-minister will never do it! He has went further than the troika demands, and he wants to go even further.

      1. @Adam (ak),
        If you’re asking whether these guys would allow this to become like Greece, I don’t think so. The Armed Forces have openly stated that they will always side with the people.
        Also, even the police forces have organised protests here – I doubt anyone would try to mount opposition against protestors should protests become too large.

        Our PM says we’re “whiny”. It has not always been the case.

  2. “Especially with the pending Greek ‘restructure’ and ECB check writing to support the banking system seemingly making the euro stronger and not causing inflation”.

    From MMT point of view defaults mean euros are vanishing and this makes the currency harder to get and hence supports the currency. But from timing point of view, when does that play, when the bonds decline and impairments are booked or when the restructuring deal becomes definitive?

    Looks indeed that ltro took some pressure from the euro. Maybe some comments from Bernanke also pressed on the USD. In the meantime we saw reduced lending to the private sector in the eurozone, shrinking German gdp and rising unemployment in many ez countries. Maybe technicals play some role, but the whole picture looks to me still pretty much the same bad.

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