Portuguese PM resigns - FM: 'doubt we will bear this on our own'
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There have been stormy scenes in the Portuguese parliament tonight. The EU-backed austerity plan was rejected, with only the ruling Socialists voting for. The PM stormed out of the chamber before the debate ended and promptly resigned. There will now be an election. (For the background, click on my report, above on the structural crisis facing Portugal).
The finance minister, in an emotional speech, warned deputies the fall of the government would present "additional difficulties for the country's financing which I doubt we will be able to bear on our own".
The opposition centre-right PSD is not opposed to seeking an IMF bailout. The 20% of parliament that is far left and communist most definitely does oppose it, so the Socialists' eventual representation in parliament will determine on what terms the country now goes to the EFSF-IMF for a bailout.
Comment number 1.
At 24th Mar 2011, BobRocket wrote:I have a feeling the Portuguese banks will collapse before they get round to having a general election.
IMF will take control of government spending and the ECB will take control of the Portuguese central bank, a bailout will occur with tough conditions.
In about 18 months the new government will collapse in a sea of allegations of mis-management/corruption surrounding the finance minister (previous/current) and a vote of no confidence will be succeeded by a new government that vows to renegotiate the terms of the bailout.
In the meantime, the Irish government won't be able to renegotiate, the Greeks will still be a problem and Spain will wobble ever closer to financial collapse.
Here in the UK, stagnation is the name of the game.
(EZBonds take a step closer to reality with every passing day)
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Comment number 2.
At 24th Mar 2011, barriesingleton wrote:THE PETER PRINCIPLE
In a hierarchy every employee tends to rise to his level of incompetence.
THE BARRIE PROPOSITION
On a clement planet, sentient beings tend to expand community and complexity beyond viability.
Commerce/finance is only a SYMPTOM.
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Comment number 3.
At 24th Mar 2011, tawse57 wrote:UK Consumer spending fell 0.8% last month. Whilst fuel rose 2.4%
The economy has ground to a halt but the politicians, of any party, just don't get it yet.
They are as disconnected from the economic reality that the UK population faces daily in the same way that all the Arab dictators are disconnected from their populations.
Public anger is growing. It is just beginning to manifest itself here in the UK.
Portugal is bust. Spain is next.
I hear more and more working people openly talking that it is no longer economically viable for them to go to work.
I am shocked by how many are openly planning to give up their jobs in order to go on benefits. These are often people in the 30K to 40K salary range. I know many people earning 12K - yes 12K - to 25K who are in huge and growing debt as they need debt to live.
The country is bust but the likes of Clegg, Cable, Cameron and Osbourne may as well live on the Moon compared to many in this country.
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Comment number 4.
At 24th Mar 2011, watriler wrote:The IMF are more likely to be hawkish and demand even more draconian measures to run the economy down in the mistaken belief that it will deal with the deficit. I would have thought it would be better to persuade the EU to refinance the sovereign debt and cover the deficit so that a policy to grow the economy can be implemented. Alternatively the Portuguese may want to have their Tahrir Square moment.
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