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Portugal's borrowing costs rise after Socialist leader rejects bailout terms
Source: The Guardian
Portugal's borrowing costs rise after Socialist leader rejects bailout terms
Phillip Inman, economics correspondent
The Guardian, Friday 12 July 2013 20.18 BST
Portugal's opposition Socialist party spooked financial markets and pushed up the government's cost of borrowing after it demanded Lisbon renegotiate the terms of its bailout deal with Brussels.
The news came as Fitch became the third ratings agency to strip France of its AAA rating, to AA+. In Portugal, the Socialist leader, António José Seguro, said he was ready to discuss a pact with the prime minister, Pedro Passos Coelho, but any coalition needed to agree that austerity measures agreed with Brussels had failed. "We have to abandon austerity politics. We have to renegotiate the terms of our adjustment programme," Seguro told parliament. "The prime minister has to recognise publicly that his austerity policies have failed."
The political turmoil has already forced Lisbon to request a delay in the eighth review of the bailout by its creditors, initially due to start on Monday, until the end of August or early September.
The delay drove up yields on Portuguese government bonds, which determine Lisbon's borrowing costs, with 10-year yields surging 90 basis points to 7.87%.
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Phillip Inman, economics correspondent
The Guardian, Friday 12 July 2013 20.18 BST
Portugal's opposition Socialist party spooked financial markets and pushed up the government's cost of borrowing after it demanded Lisbon renegotiate the terms of its bailout deal with Brussels.
The news came as Fitch became the third ratings agency to strip France of its AAA rating, to AA+. In Portugal, the Socialist leader, António José Seguro, said he was ready to discuss a pact with the prime minister, Pedro Passos Coelho, but any coalition needed to agree that austerity measures agreed with Brussels had failed. "We have to abandon austerity politics. We have to renegotiate the terms of our adjustment programme," Seguro told parliament. "The prime minister has to recognise publicly that his austerity policies have failed."
The political turmoil has already forced Lisbon to request a delay in the eighth review of the bailout by its creditors, initially due to start on Monday, until the end of August or early September.
The delay drove up yields on Portuguese government bonds, which determine Lisbon's borrowing costs, with 10-year yields surging 90 basis points to 7.87%.
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Read more: http://www.guardian.co.uk/world/2013/jul/12/portugal-borrowing-costs-bailout
