Portugal “shows off relative financial health” by reimbursing IMF ahead of time

The irony is not missed on Associated Press which carried a news item this morning declaring: “Portugal is showing off its relative financial health – and signalling it is different from Greece – by paying back another batch of international loans ahead of their due date.

As national media has already explained, Finance Minister Maria Luís Albuquerque has announced she is ready to pay back almost two billion to the IMF ahead of loan agreement schedules.

The news follows the first “fast-tracked” repayment made by Portugal to the IMF in March (€6 billion).

AP explains the payback had been made easier by record-low yields on government bonds – prompted by the ECB’s huge quantitative easing programme. It is also a clear sign of a recovering economy.

Wasting no time to turn the news to the best electoral advantage, the coalition government’s deputy prime minister Paulo Portas told a meeting of party faithful in the Azores over the weekend that Portugal’s return to bankruptcy could so easily return if the PS (Socialist Party) is voted into power in the looming elections.

Four years ago, “we had to deal with the bankruptcy”, he said, and “change the course of the economy”.

Considering all this, why should the country “risk going backwards to the problem of the PS”, he queried.

But as AP points out: “Some analysts reckon Portugal … could become vulnerable to market uncertainty if Greece’s problems deepen”.

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