Portugal might have an unemployment rate of 18 per cent, a below investment grade credit rating and a recession to deal with, but according to its Secretary of State for Finance the country can emerge from its financial crisis without needing another aid plan.
Last year Mario Draghi, President of the European Central Bank, asserted that when Eurozone nations currently under bailout programmes (like Portugal) regained access to bond markets they would be considered for the Outright Monetary Transactions scheme – the central banks bond buying programme.
And Portugal is determined to be found eligible.
In a recent interview Manuel Rodrigues asserted: ‘Portugal is regaining full market access and full market access will guarantee the eligibility for the OMT programme. We will not need other additional programs – the fact that Portugal is eligible for the OMT will necessarily have a very positive impact on our credit risk profile. We are working on ensuring that we are eligible for this programme […] Our banking institutions are now stronger than before. We don’t expect more recapitalizations will be needed.’
This year Portugal began selling bonds again, nearly two years after being granted a European Union/International Monetary Fund bailout of 78 billion Euros, which ends in 12 months time.
Despite his optimism regarding the odds of Portugal being considered for the OMT scheme, Rodrigues was realistic about some of the difficulties the nation faces. He commented: ‘The biggest concern we have in Portugal and Europe has to do with unemployment, and in particular with youth unemployment.’
As it stands, the Portuguese government expects Portugal’s economy to contract by 2.3 per cent this year before posting modest growth of 0.6 per cent next year and last month Portugal’s Finance Minister Vitor Gasper stated that the nation has already met its pre-financing requirements for 2013.
In the hours ahead Euro movement can be expected to occur in response to several pieces of key economic data, including Eurozone/German Services PMI and Eurozone GDP figures.
Euro (EUR) Exchange Rates As of 09:00 –
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3074 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8541 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.3668 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6359 >