Bloomberg News

Portugal Sees Signs EU Support Will Continue After Aid Plan

June 21, 2013

Portugal will probably be able to rely on European support after the end of the country’s aid plan, Finance Minister Vitor Gaspar said.

“Portugal has benefited from the support and solidarity of Europe,” Gaspar told reporters in Luxembourg, as European finance (SWEF) ministers met. “This solidarity will persist after the aid program ends.”

The European Union is looking at possible precautionary arrangements that may underpin Ireland and Portugal’s exit from their aid programs, Economic and Monetary Commissioner Olli Rehn said July 17. Ireland will probably apply for such a facility, two people familiar with the matter said yesterday.

“It’s still premature to discuss the models that aid would take,” Gaspar said. He said the country is “starting to access the markets” after it sold 10-year debt for the first time in more than two years last month.

Portuguese 10-year bond yields rose to 6.4 percent today, increasing for a second day as concern that policy makers around the world will reduce stimulus curbed demand for fixed-income assets.

Bond Swap

Gaspar said the country may also exchange more bonds after arranging Oct. 3 to swap 3.8 billion euros ($4.99 billion) of securities due in September 2013 for the same value of notes maturing in October 2015.

Secretary of State for Finance Manuel Rodrigues said in an interview with Bloomberg Television June 4 that the country was working to ensure eligibility for the European Central Bank’s debt-purchase program, called Outright Monetary Transactions. A country needs to have access to a precautionary credit lines to qualify for the new program.

“Portugal is regaining full market access and full market access will guarantee the eligibility for the OMT program,” Rodrigues said. “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.”

To contact the reporter on this story: Anabela Reis in Luxembourg at areis1@bloomberg.net

To contact the editor responsible for this story: Jerrold Colten at jcolten@bloomberg.net


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