UK press dubs Portugal “problem child of the Eurozone” as Cavaco stays silent

With total uncertainty over when President Cavaco Silva intends to address the nation on the form of the next government, a UK newspaper has dubbed Portugal “the problem child of the eurozone”, while bond yields are climbing (which means, the price is dropping).

In fact, everyone with any kind of position politically, financially and academically is speaking out, while the man whose words we are all waiting for fails to make any sound at all.

Económico website suggests Cavaco could speak “even today”, but “the problem is that no-one really knows when”.

All formal talks with the various political parties involved have taken place, explains the site.

The next step is for Cavaco to address the nation and appoint a prime minister.

The UK’s Financial Times stresses “constitutional precedent” would suggest Cavaco appoints caretaker prime minister Pedro Passos Coelho – but if this happens, the “minority centre-right government” could be “brought down within weeks by the combined votes of left-of-centre parties”.

With markets dropping and investors admitting to being “very reluctant to invest in Portugal’s debt”, the truth is that in this maelstrom of uncertainty, Portugal has the EU’s second highest deficit, and third worst level of public debt.

This latest shock was delivered by Eurostat this morning – painting a sorry picture of a eurozone where 14 countries have deficits over and above the 3% limit set by Brussels.

With the iron-grip of the troika looking more and more like the kiss-of-death to the European ideal, the UK’s Daily Telegraph explains how the Left has torn up the script and demands to govern.

“The anti-austerity revolt in Portugal is a foretaste of what may happen in a string of EMU (economic and monetary union) states when the global economic expansion rolls over,” predicts the Telegraph’s economics editor Ambrose Evans-Pritchard, adding that “the upset in Portugal has caught Europe’s elites off-guard”.

“Europe’s leaders thought the crisis was over,” he explains – stressing “they believed their own propaganda that Portugal has successfully clawed its way back to safety by adhering strictly to Troika terms. This was always wishful thinking”.

Today, wishes almost universally centre on a decision, either way. Left or right. If we are lucky, Portugal’s president may announce it this evening.

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Photo: LUSA