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You can find the current article at its original source at http://www.guardian.co.uk/business/2012/mar/19/eurozone-crisis-portugal-bailout-greece
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| Version 1 | Version 2 |
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| Eurozone crisis live: Portugal bailout fears grow | Eurozone crisis live: Portugal bailout fears grow |
| (40 minutes later) | |
| 9.55am: As TheThistle points out in the comments below, Greek prime minister Lucas Papademos has given an interview to the Financial Times today, in which he says the country is "over halfway to recovery". | |
| The full story's here (behind the FT paywall). They've also uploaded the full transcript (ditto), which I've read, and seen that Papademos makes some rather interesting points. | |
| Early in the interview, he said Greece's current economic program (agreed with the EU/IMF/ECN) should be complemented with new policy measures to "support economic activity and employment over the short and medium term". | |
| He said the current plan has damaged the Greek economy in three ways: | |
| First, there have been implementation gaps, particularly with regard to the growth-enhancing reforms. Second, the external environment turned out worse than initially expected. Third, a major factor has been the reduced confidence and the increased uncertainty over the past year-and-a-half. | |
| Papademos was also asked to comment on the idea that Greece will need a third rescue package. He appeared to concede that this is a possibility: | |
| Well, I think this simply reflects the fact that one cannot predict with precision the exact time when the country can regain access to the markets. It may happen in three years, it may happen over a longer period of time. | |
| If by 2015 market access is not possible then it may be necessary to rely more on official funding. | |
| Papademos also argued that "a large silent majority" of the Greek people appreciate the fiscal discipline needed to be a member of the eurozone, and believe that it will be easier to rebalance their economy within the euro than outside. | |
| Finally, he refused to speculate on the suggestion that he might remain as prime minister after the upcoming general election, or become finance minister. Papademos was billed as a temporary appointment when he was chosen as technocratic PM last November. But if the election delivers a deeply divided parliament, though, a unity candidate could be needed. | |
| 9.18am: Italy's industrial sector suffered a dramatic drop in orders in January, data released at 9am GMT showed. | 9.18am: Italy's industrial sector suffered a dramatic drop in orders in January, data released at 9am GMT showed. |
| Italian industrial orders fell by -7.4% on a month-on-month basis in January, much worse than the 3.2% decline pencilled in by economists. | Italian industrial orders fell by -7.4% on a month-on-month basis in January, much worse than the 3.2% decline pencilled in by economists. |
| This comes on top of recent data showing that Italian industrial output had dropped by 2.5% in January. Today's fall in orders suggests output in future months could also disappoint. | |
| 9.05am: The euro has dropped back this morning, as Mohamed El-Erian's prediction that Portugal will need a second bailout are digested. | 9.05am: The euro has dropped back this morning, as Mohamed El-Erian's prediction that Portugal will need a second bailout are digested. |
| The single currency fell nearly half a cent against the US dollar to $1.314, and also lost a third of a penny against sterling to 82.99p. | The single currency fell nearly half a cent against the US dollar to $1.314, and also lost a third of a penny against sterling to 82.99p. |
| Peter O'Flanagan of Clear Currency, a foreign exchance broker, said El-Erian's comments had: | Peter O'Flanagan of Clear Currency, a foreign exchance broker, said El-Erian's comments had: |
| ...shifted risk sentiment and is weighing particularly on the euro. | ...shifted risk sentiment and is weighing particularly on the euro. |
| Gary Jenkins of Swordfish Research argue, though, that the financial markets could cope with a second Portuguese rescue package, if needed, but... | Gary Jenkins of Swordfish Research argue, though, that the financial markets could cope with a second Portuguese rescue package, if needed, but... |
| if Italy were to do the same thing then it would probably spell the end of the Eurozone as we know it. | if Italy were to do the same thing then it would probably spell the end of the Eurozone as we know it. |
| 8.45am: The main event on the agenda today is the auction to determine payouts to investors who held insurance against a Greek default (I'll blog more about this shortly). Portugal's finance minister is also due to speak this afternoon in America - Mohamed El-Erian's comments could come up.... | 8.45am: The main event on the agenda today is the auction to determine payouts to investors who held insurance against a Greek default (I'll blog more about this shortly). Portugal's finance minister is also due to speak this afternoon in America - Mohamed El-Erian's comments could come up.... |
| There's not too much on the economic calendar, but a few bond autions are scheduled. | There's not too much on the economic calendar, but a few bond autions are scheduled. |
| Here's the agenda: | Here's the agenda: |
| • IMF visit to China/India: all day • Italian industrial orders/sales for January: 9am GMT • Eurozone construction output for January: 10am GMT • Greek CDS auction: begins at 11am, concluded at 3.30pm • Vitor Gaspar, Portuguese minister of finance, addresses the Peterson Institute: 4.30pm GMT / 12.30pm EST | • IMF visit to China/India: all day • Italian industrial orders/sales for January: 9am GMT • Eurozone construction output for January: 10am GMT • Greek CDS auction: begins at 11am, concluded at 3.30pm • Vitor Gaspar, Portuguese minister of finance, addresses the Peterson Institute: 4.30pm GMT / 12.30pm EST |
| Bond auctions: The Netherlands, Slovakia, France, Lithuania, Italy.... | Bond auctions: The Netherlands, Slovakia, France, Lithuania, Italy.... |
| 8.34am: As promised, here's more details of Evangelos Venizelos's election as the president of the socialist Pasok party (via Helena Smith in Athens). | 8.34am: As promised, here's more details of Evangelos Venizelos's election as the president of the socialist Pasok party (via Helena Smith in Athens). |
| As thousands of Pasok members filed into polling stations to endorse the bullish politician – who was the sole candidate - Venizelos pronounced the start of a "new era" for a party whose popularity has plummeted navigating Greece's financial crisis. | As thousands of Pasok members filed into polling stations to endorse the bullish politician – who was the sole candidate - Venizelos pronounced the start of a "new era" for a party whose popularity has plummeted navigating Greece's financial crisis. |
| "This is the beginning of Pasok's quest to find its soul again," said the 55 year-old law professor who replaces former prime minister George Papandreou. | "This is the beginning of Pasok's quest to find its soul again," said the 55 year-old law professor who replaces former prime minister George Papandreou. |
| With general elections due to take place as early as 29 April, Venizelos' selection as leader of what has traditionally been the country's biggest leftist force is seen as key to political stability. In an economic climate that has become increasingly explosive, polls have shown other leftist groups and extremists gaining ground ahead of the national vote. | With general elections due to take place as early as 29 April, Venizelos' selection as leader of what has traditionally been the country's biggest leftist force is seen as key to political stability. In an economic climate that has become increasingly explosive, polls have shown other leftist groups and extremists gaining ground ahead of the national vote. |
| The finance minister, who is expected to resign from the post on Monday, is among Athens' most talented politicians, whose handling of the €206bn (£171bn) bond swap - the success of which surprised even the cynics - has won widespread plaudits. | The finance minister, who is expected to resign from the post on Monday, is among Athens' most talented politicians, whose handling of the €206bn (£171bn) bond swap - the success of which surprised even the cynics - has won widespread plaudits. |
| "It's astonishing that a French-trained law professor who was not a typical expert in economics did so well negotiating what is one of the biggest financial experiments in modern global history," said Theodore Pelagidis, professor of economic analysis at Piraeus university. | "It's astonishing that a French-trained law professor who was not a typical expert in economics did so well negotiating what is one of the biggest financial experiments in modern global history," said Theodore Pelagidis, professor of economic analysis at Piraeus university. |
| "Because he is so mentally sharp he was able in record time to familiarise himself with exotic financial tools and procedures." | "Because he is so mentally sharp he was able in record time to familiarise himself with exotic financial tools and procedures." |
| Helena's full story is here. | Helena's full story is here. |
| The latest polling data shows that Pasok, which had won the last general election, is on track to lose much of its support when Greeks head to the polls. | The latest polling data shows that Pasok, which had won the last general election, is on track to lose much of its support when Greeks head to the polls. |
| Several smaller parties are taking support away from the two traditional players – Pasok and the right-wing New Democracy – suggesting that a coalition government (not always a recipe for stability) is very likely. | Several smaller parties are taking support away from the two traditional players – Pasok and the right-wing New Democracy – suggesting that a coalition government (not always a recipe for stability) is very likely. |
| 8.22am: Mohamed El-Erian's warning that Portugal will need a second financial aid package is attracting plenty of attention this morning. | 8.22am: Mohamed El-Erian's warning that Portugal will need a second financial aid package is attracting plenty of attention this morning. |
| As we reported last night, the Pimco CEO was asked by Der Spiegel whether the Portuguese government will need to seek additional support, replying: | As we reported last night, the Pimco CEO was asked by Der Spiegel whether the Portuguese government will need to seek additional support, replying: |
| Yes, unfortunately that will be the case. | Yes, unfortunately that will be the case. |
| El-Erian went on to predict that the creation of this (hypothetical) second package would be as difficult as the negotiations over Greece's aid deal, telling the German news magazine that: | El-Erian went on to predict that the creation of this (hypothetical) second package would be as difficult as the negotiations over Greece's aid deal, telling the German news magazine that: |
| there will be a big debate about how to split the burden between the EU, creditors, the IMF and the European Central Bank. And then financial markets will become nervous because they are worried about private sector participation. | there will be a big debate about how to split the burden between the EU, creditors, the IMF and the European Central Bank. And then financial markets will become nervous because they are worried about private sector participation. |
| El-Erian's comments will not be welcomed in Brussels, where officials have repeatedly insisted that Greece is a special case. But the Daily Telegraph argues this morning that market faith in the EU has been 'shattered' by the Greek debacle. | El-Erian's comments will not be welcomed in Brussels, where officials have repeatedly insisted that Greece is a special case. But the Daily Telegraph argues this morning that market faith in the EU has been 'shattered' by the Greek debacle. |
| Looking at the bond markets, Portuguese debt has fallen slightly in value this morning, pushing up the yield on its 10-year bonds to 13.7%. That level of interest rate indicates that the country is still locked out of the international money markets. Officially, Lisbon hopes to borrow from international investors in 2013 – for that to happen, its bond yields will need to drop closer to, say, 7%. | Looking at the bond markets, Portuguese debt has fallen slightly in value this morning, pushing up the yield on its 10-year bonds to 13.7%. That level of interest rate indicates that the country is still locked out of the international money markets. Officially, Lisbon hopes to borrow from international investors in 2013 – for that to happen, its bond yields will need to drop closer to, say, 7%. |
| 8.10am: Good morning, and welcome to our rolling coverage of the eurozone financial crisis. | 8.10am: Good morning, and welcome to our rolling coverage of the eurozone financial crisis. |
| Today, Portugal is in the spotlight after bond trading giant Pimco claimed it will need a second bailout. Pimco chief executive Mohamed El-Erian warned on Sunday that "unfortunately" Lisbon will be forced to seek fresh aid rather than return to the financial markets as planned. | Today, Portugal is in the spotlight after bond trading giant Pimco claimed it will need a second bailout. Pimco chief executive Mohamed El-Erian warned on Sunday that "unfortunately" Lisbon will be forced to seek fresh aid rather than return to the financial markets as planned. |
| The state of the world economy is also in focus as the International Monetary Fund visits India. Christine Lagarde, head of the IMF, has called on China to reform and warned that developed countries need to strengthen their financial systems. She had earlier cautioned against taking too much comfort from recent developments. | The state of the world economy is also in focus as the International Monetary Fund visits India. Christine Lagarde, head of the IMF, has called on China to reform and warned that developed countries need to strengthen their financial systems. She had earlier cautioned against taking too much comfort from recent developments. |
| There are political developments in Greece, where Evangelos Venizelos has assumed the leadership of the Pasok party, after a hectic eight-month stint as finance minister. Venizeloz declared that a "new era" has begun in Greek politics. We'll have a full report on his accession shortly. | There are political developments in Greece, where Evangelos Venizelos has assumed the leadership of the Pasok party, after a hectic eight-month stint as finance minister. Venizeloz declared that a "new era" has begun in Greek politics. We'll have a full report on his accession shortly. |
| The final stage of Greece's debt restructuring will play out today, when an auction is held to determine the payouts for investors holding insurance against a Greek default. | The final stage of Greece's debt restructuring will play out today, when an auction is held to determine the payouts for investors holding insurance against a Greek default. |
| Greece should also receive the first tranche of its second aid deal, worth €5.9bn, today. | Greece should also receive the first tranche of its second aid deal, worth €5.9bn, today. |