Portugal’s creditors “silent” since Cavaco’s speech

With the country’s newspapers all tracing deadlines for the fall of Portugal’s new centre-right government, Dinheiro Vivo has gone a step further, and quizzed the country’s creditors on how they view the decision by President Cavaco Silva to appoint a prime minister leading a vulnerable minority.

The European Commission, the European Stability Mechanism and the IMF all declined to be drawn on the website’s question: ‘has the decision given the guarantee of stability that Cavaco claims he so much desires?’

The stability mechanism – a creditor to the tune of €27.3 billion – simply replied: “No comment”.

The EC – responsible for €24.4 million loaned to Portugal – said through Margaritis Schinas: “We will have to wait and see”, adding that “the process (of forming the new government) is underway, so we have nothing further to add”.

A spokesman for EC President Jean-Claude Junker has “reiterated” the “wish to work closely with the new government”, while the IMF – creditor of €20.5 billion – said: “We do not comment on political matters”.

Portugal has already started to repay the IMF loan as, DV explains, “it is very much more expensive than the European and market financing”. According to the agency that manages Portugal’s debt, €7 billion has already been paid back.

DV adds that Portugal “still owes in total, €72.1 billion to its official creditors (involved in the adjustment programme) as well as a further €154 billion to national banks, foreigners and Portuguese families (via certificates)”.

Portugal’s European lenders want to be paid by 2042, while the IMF wants its money back within the next seven years.

Meantime, a sign that the alliance of Portugal’s left-wing parties is gaining ground came as MPs started taking their seats in the Republican Assembly on Friday.

Ferro Rodrigues, the former PS leader, was overwhelming voted in as president.

The 120-108 ballot showed how easily the government’s coalition was outnumbered.

The result was “in conflict with tradition”, lamented PSD parliamentary leader Luís Montenegro – as normally the party that has the most votes is in a position to elect the leader of the house.

Commenting on Rodrigues’ ‘coup’, national tabloid Correio da Manhã said the left had “won the first round in a fight that has only just begun”.

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