Brussels, 06/04/2011 (Agence Europe) - Any talks that might lead to financial aid start with a formal request being submitted, but “I am not aware of any such request”, commented a spokesperson for EU Economic and Monetary Affairs Commissioner Olli Rehn on Wednesday 6 April. The European Commission is, however, in regular contact with Lisbon as part of its continuous assessment of national budget policies.
Portuguese media report that the country's major banks are putting pressure on the caretaker government to negotiate a bridging loan of around €15 billion to meet its financial commitments between now and mid-June 2011, but general elections will be held early in June. The banks' credit ratings have been downgraded and they now feel over-exposed to the default risks of the Portuguese sovereign debt. Rehn's spokesperson said that existing aid systems for the eurozone do not allow bridging loans to be made to countries, and any type of aid that another member state might offer was none of the Commission's business. The spokesperson refused to comment on whether a caretaker government was entitled to request international aid, saying this was a matter for the country itself to decide. The Portuguese Socialist party, headed by defeated prime minister José Sócrates, and the centre right PSD party, headed by Pedro Passos Coelho and expected to win according to opinion polls, are split over the issue.
On Wednesday, Portugal rolled over a little more than a billion euros at six months and a year, at higher interest rates than for similar loans a little over a fortnight ago (5.9% rather than 4.33% for the one-year bonds and 5.1% rather than 3% for the six-month bonds). The Portuguese finance minister said that the level of the current interest rates was such that the damage caused by the rejection of the austerity programme is irreparable, but said the state would be able to meet its planned financial commitments. The Portuguese parliament's rejection of the fourth batch of austerity measures forced the government to resign.
Greece. Asked about talks reportedly being held by several countries over restructuring the Greek public debt, Rehn's spokesperson said he did not know about it and repeated the Commission's view that the international financial aid granted to Greece in return for an austerity programme would help the country sort out its public finances, introduce the necessary economic reforms and regain investor confidence so that it will be able to raise funds on the money markets itself by 2013. The spokesperson said the Commission rejected the idea of restructuring Greece's debt because it has a special plan. Both issues may well be discussed at the ECOFIN Council in Budapest on 8 and 9 May (see related article). (M.B./transl.fl)