Portugal political situation FT article; EU agrees new €700 billion fund to protect euro zone; Portuguese Censos 2011;

Portugal & Madeira News from Paul Abbiati:

Portugal: political situation

FT article, March 22, 2011

“Portugal faces an imminent political crisis that could force the government to resign, trigger a snap election and make an international financial rescue inevitable, according to government ministers and opposition leaders.

The minority Socialist government is almost certain to be defeated on Wednesday in a parliamentary vote on a new austerity package, leaving José Sócrates, the prime minister, with little alternative but to resign.

José Sócrates, prime minister of Portugal in Brasília, 2006

Opposition parties have refused to back the austerity measures, which Mr Sócrates planned to take to a key European Union summit meeting at the weekend as proof of Portugal’s determination to avoid a bail-out.

Pedro Passos Coelho, leader of the centre-right Social Democrats, the main opposition party, rejected a government offer for talks on the measures on Monday night, saying an early general election was “inevitable”.”

“According to Fernando Teixeira dos Santos, finance minister, a government crisis would further undermine confidence and represent “a big push” towards seeking a financial rescue from the EU and the International Monetary Fund.

If Mr Sócrates resigned on Wednesday, he would be expected to attend the EU summit as Portugal’s outgoing prime minister in a caretaker capacity.

It would fall to Aníbal Cavaco Silva, Portugal’s conservative president, to set the date of an early election after consulting political parties.”

“Mr Passos Coelho, who seeks to replace Mr Sócrates as prime minister, accuses the government of making commitments to the EU without having secured the necessary support to see the measures through parliament.”

Mr Passos Coelho ,EPP Summit June 2010

“Mr Passos Coelho, who enjoys a lead in opinion polls, said he fully supports Portugal’s deficit-reduction targets, but his party has not yet specified alternative measures for meeting the objectives.

He says he would favour a broad coalition government, including the small conservative Popular party. Some senior PSD officials have called for a “grand coalition” with the Socialists.

Mr Sócrates, who has been in office for six years, has made it clear that he would fight for re-election as prime minister in the event of an early poll.”

Link: http://www.ft.com/cms/s/0/2a8721ea-5470-11e0-979a-00144feab49a.html#axzz1HKN5EWHL

New permanent fund: The European Stability Mechanism (ESM)

EU agrees €700 billion fund to protect euro zone

Euractiv article 22 March 2011:

“EU finance ministers agreed yesterday (21 March) to boost a permanent stability fund, which from mid-2013 will hold €700 billion to shield eurozone countries from future debt crises.”

“At the height of the Greek debt crisis, the EU set up in May 2010 a European Financial Stability Facility (EFSF). It allows to borrow cash on the market up to €250 billion against up to €440 billion of joint eurozone government guarantees to help a eurozone member state that cannot finance itself on the markets. The instrument is already being used to lend money to Greece and Ireland.”

“Rising costs of borrowing in Portugal, coupled with market uncertainty over the country’s ability to reduce its budget deficit and debt, fuelled speculation that Lisbon would also eventually have to apply for EFSF help.”

The new European Stability Mechanism (ESM)

“An extraordinary ministerial meeting yesterday hammered out the technicalities of the new permanent fund, called the European Stability Mechanism (ESM), which will effectively be able to lend up to €500 billion to distressed euro area members.”

“The fund will be operational as from mid-2013 and will replace the existing temporary facility – the European Financial Stability Facility (EFSF) – put in place to bail out Ireland and Greece.”

“…the ESM, which by 2016 will rely on €80 billion directly provided by member states. €40 billion will have to be made available by July 2013, “with the remaining share being phased in over the three following years,” reads the text agreed by EU finance ministers.”

“Germany will contribute the lion’s share of this amount, making transfers of around €21.6 billion. France and Italy will contribute €16.2 billion and €14.3 billion respectively.

The payments are calculated on the basis of a contribution key that governs the relationship between each member country and the European Central Bank (ECB). To address the concerns of Eastern European countries, which have complained about the contribution key, ministers agreed to establish a 12-year period during which countries whose GDP is below the EU average will pay less.

The remaining €620 billion in the ESM will be provided by callable capital and guarantees, and the proportion contributed by these two instruments will be flexible. Member states will have to pledge these amounts when necessary.”

link to full article: http://www.euractiv.com/en/print/euro-finance/eu-agrees-700-fund-protect-euro-zone-news-503335

Portuguese Censos 2011

The Diario reports:

From today 21 de Março until 10 de Abril the censos can be completed and returned online: www.censos2011.ine.pt

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