Portugal is by no means out of the woods, but the negative publicity focusing on German Finance Minister Wolfgang Schauble’s pasting last week has at least been countered by relatively good news from Moody’s ratings agency.
According to the firm’s latest report, Portugal’s perspective remains “stable”.
The context, that “modest economic recovery will continue to support the country’s banks” gives this stability a 12-18 month timeframe, says TVI24, and therefore should help with Brussels’ approval of the government’s controversial 2017 State Budget.
As the station explains, the “theme of Portuguese banks” has been “one of the Achilles heels in the elaboration of the budget” – particularly when it comes to the recapitalisation of State bank Caixa Geral de Depósitos.
But Moody’s has seen some “counterbalancing factors”. Reuters news agency quotes the agency’s financial analysts as“talking of a very comfortable situation of liquidity” with “a cushion of €12 billion until the end of the year”.
Needless to say, however, Moody’s overall rating has remained unchanged since July 2014.
Portugal’s risks remain very high (Ba1, which is the first rubbish category), while the nation’s banks have an even greater ‘rubbish risk’ associated to them.
Jornal de Negoçios explains BPI – under offer from Spain’s Caixa Bank – is rated at Ba3 (the third degree of ‘speculative’), CGD and BCP at B1 (the fourth level of rubbish) and Montepio at B3 (sixth degree of rubbish).