Portuguese Bond Sale May Make Bailout `Inevitable’: "
As the ‘P’ in PIIGS which stands for the European countries collapsing under socialist nanny state policies, Portugal is entering its early stages of collapse.
By Matthew Brown at Bloomberg.com
EXCERPTS:
Its existing 10-year debt has yielded more than 7 percent in 10 of the past 62 days, according to Bloomberg data. Greece needed a rescue within 17 days of its 10-year yield breaching 7 percent on April 6, while Ireland lasted less than a month after it cracked that level in October.
“Even if we see a successful auction, it doesn’t mean anything, because at rates above 7 percent it’s not sustainable,” said Ioannis Sokos, a strategist at BNP Paribas SA in London. “It is inevitable that Portugal has to turn to the EU and IMF if they keep borrowing at these levels.”
A bailout for Portugal may oblige Germany to end its objections to expanding the region’s 750 billion euro rescue facility, or to bond issues that are guaranteed by all euro members, according to Christoph Rieger, head of fixed-income strategy at Commerzbank AG in Frankfurt.
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