Constitutional crisis pushes Portugal closer to the brink

Portugal's borrowing costs have spiked dramatically after key political parties failed to agree on a national salvation front, raising the risk of a snap election and an anti-austerity revolt.

Yields on 10-year Portuguese bonds jumped more than 100 basis points to 7.85pc in a day of turmoil, kicked off by a government request to delay the next review of the country’s EU-IMF Troika bail-out until August.

Dacorum: How I long for this painful and slow lingering death of the Euro to be finally over!  By now, surely even the thickest of Portuguese politicians must be beginning to realise that balancing the books by austerity alone and remaining a member of the Euro Zone is just not possible?  They need to devalue as well and that means leaving the Euro. I feel sorry for the people of Portugal. They have been sold down the river by their politicians from all parties. 

whitehart: Even the thickest of British polictos can see the EU is B***** useless yet We are still in it up to our necks so who are we to Bob Crow?

berosos_bubos: In the UK Drax the largest power station is to burn woodchips at three times the expense of coal. This is for the same reason as the EU is still supported by the beauracrats. It allows the politicians to strut on the world stage and their pride doesn't allow them to admit they're wrong.

Huw Sayer: There was an excellent report in The Economist recently pointing out that wood-pellets aren't even carbon neutral - effectively demolishing the case for this cranky 'alternative' fuel.  Subtitled 'Environmental Lunacy' the report concludes: "In short, the EU has created a subsidy which costs a packet, probably does not reduce carbon emissions, does not encourage new energy technologies—and is set to grow like a leylandii hedge."

colinvar: Politicians in all EU states have sold their people to the devil.  They are like a cult which would sacrifice everything to "the Project".  Reminds me of a book by C S Lewis "That Hideous Strength".

whitehart: They are all stubborn greedy and pig ignorant and cant jump off the gravy train while THEY still get paid!

paulw: Portugal is toast. New elections followed by € exit and reintroduction of the escudo  is the solution.

bionde:  I hope you are right. It just needs one country with cojones to show the way.

berosos_bubos: That would make Beroso seriously ill ;

dougaussie: Austerity = unemployment = high welfare = high taxes = more unemployment. Bottom line austerity to pay off debt is an illusion, it won't work. The only way to deal with debt is wipe it, sorry, yes, wipe it, take it on the chin, take a bath, cop it sweet. Sometimes you just have to hit the reset button.  Banks are pushing for their pound of flesh at any cost, even civil war or the complete meltdown of national soverignity or identity, its criminal insanity to try and make something work which won't.

malcolmf: why should debt be wiped? Countries like Australia, which had surplus budgets, when Europe was spending big and as a result got through the GFC. If debt is wiped, there is no incentive to improve economic responsibility.

redsinexile: The moral hazard position is, er… morally correct. But ask yourself why the remedy of bankruptcy exists for the individual. The point is that, due (in part) to the link between the banking sector and the states themselves plus scandalously inept economic policy at a global level, states are now so indebted that repayment is impossible.  Bailouts (loans, not gifts) only add to the debt mountain. The bond market rates, ditto. Austerity has been seen to reduce the tax base and hence increase, not decrease, the debt-GDP ratio. And can also be criticised on moral grounds - internal devaluation impoverish the people. One way out - as with bankruptcy - is to start again with new rules (and no Euro). Better to do so in an orderly way rather than have states default piecemeal, stating with Portugal.

posterboy: Well that's your pension gone then, squire.  Hope you are not over 50.

$50176704: I haven't read the whole article, I don't need to. They need to drop the bullshit currency they have no control over like hot coals. They got their drugs policy right after years of abuse at the hands of arseholes who wanted them doped up and unable to fight back. Now they need to get their hands from behind their back having had them painfully tied there. Good luck Portugal, it's a beautiful country, you can do much much better on your own together!

Otsuka Duojinshi: In Germany the Social Democratic Party (SPD) will likely repeat its worst defeat in upcoming elections and SPD leader Frank-Walter Steinmeier has conceded as much. Her own party ousted lunatic libtard Julia Gillard from the post of Prime Minister in Australia and likely her party will be decimated this fall. Hollande is becoming a cliché of politiques socialistes hilarantes and Jean-Marie Le Pen is no longer a fringe phenomena and her fortunes rise. Barack Obama grows more irrelevant each day and mid-term elections followed by lame duck presidential paralysis is six months away. No leadership there. Seems a backlash grows; for the Eurosceptic right-wing populists and particularly Farage and UKIP - the trend is your friend. A pendulum swings back. “Everybody has been saying that Portugal is so different from Greece but if this political crisis goes on for long, that won’t be so clear anymore.” Everyone is like Greece.

remittance_man:  Jean-Marie Le Pen is a he and he retired from politics several years ago. I think you mean his daughter, Marine.

Otsuka Duojinshi: Thank you, remittance_man and vielnick for identifying these errors - sloppy. Indeed, Marine Le Pen. and former leader Steinmeier. I surely miss having editors - thanks for filling in! One always can count on the DT community to keep you honest; well, correct anyway.

Elyse_Elyse: (tee hee… )

vielnick: The SPD is so irrelevant, you must not know her irrelevant leader.Thus no correction by me!

TheOtherTurnipTaliban: Just wait until the German elections are out of the way, an epic shitstorm cometh. Merkel is holding the EU project together on a wing and a prayer but after September she'll have a fresh mandate to issue bailouts galore and sod the German public and everyone else.