Portugal puts euro breakup trade back on table
Baku, April 8 (AZERTAC). The euro EURUSD +0.32%was keeping a slippery hold on $1.30 against the dollar on Monday morning in Europe, but who knows how long it will stay there as the baton passed to Portugal in the relay race that is keeping the European debt crisis alive in Europe. Portugal stocks meanwhile, were not having a great day Late Friday, the Portugal’s high court ruled that wage and pension cuts to public sector workers, introduced as a condition of an international bailout, are unlawful because they don’t apply to all workers. That means Portugal’s government will have to come up with another 900 million euros to 1.3 billion euros or end up with a shortfall for this year’s budget. Not to mention putting its 78 billion euro ($101 billion) bailout program in jeopardy.
After the EU warned Portugal of steering off course over the weekend, German Finance Minister Wolfgang Schaeuble said Monday that the country will have to find new savings. Prime Minister Pedro Passos Coehlo, who is getting plenty of calls to resign, said on national TV on Sunday that he’ll be looking for new cuts. The Wall Street Journal reported the government had considered paying public employees and pensioners one month of their income in Treasury bills, citing a person close to the government, though a spokesman denied that would happen.
Worst-case scenario for Portugal is that it can’t raise that shortfall via spending cuts and it has to go back asking for a second bailout.
Other news in this section
