More on Portugal demanding equal terms (with who?) in Europe's resolution of the latest bankrupt state:
To recap: major lies about deficits in Greece, Spain and Portgual. But certainly all is well in Europe's core and, needeless to say, America. And if it isn't, there is always the printing press. So of all things to get sold off today (as predicted), we get the one asset that can not be printed.There is growing rancor in Lisbon over the term of the €78bn rescue by the EU and the International Monetary Fund, and the sweeping powers of the inspectors as they impose a "structural adjustment" on the economy.
The penal rate of interest charged by the EU is expected to top 5.5pc and risks trapping the country in debt-deflation. At the same time fiscal austerity, without offsetting monetary stimulus or devaluation, may tip the economy into an even deeper downturn.
EU officials are pushing hard for a 100 basis points reduction in rates on rescue loans, hoping to win backing from a reluctant Germany at an EU summit on Thursday.
The revelation of a budget hole in Portugal has echoes of what occurred in Greece in late 2009, when an audit by the new Pasok government exposed a budget deficit twice the level previously declared to the European Commission.