4 Jul 2013
Flash: Portugal at boiling point? – Deutsche Bank
FXstreet.com (New York) - In Portugal, there were signs of austerity fatigue amongst the ruling coalition government after Prime Minister Coelho lost two key ministers in as many days, notes Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank.
The resignation of Finance Minister Vitor Gaspar was promptly followed by that of the foreign minister Paulo Portas who is also head of the smaller CDS party in the coalition. Portas reportedly disagreed with the PM's decision to name Secretary of State for Treasury Maria Luis Albuquerque as a replacement for the FM, saying it would mean a continuation of the policies deepening the country's recession. PM Coelho said he didn't accept the resignation request and hasn't asked the President to dismiss Portas due to the minister's importance in the coalition.
Portas did not say whether he would take his junior party out of the government - a step that would leave the government without a parliamentary majority. Portuguese bond yields added 33bp yesterday to 6.72% and are now up more than 140bp since the May lows. The PSI equity index finished 1.3% weaker.
The resignation of Finance Minister Vitor Gaspar was promptly followed by that of the foreign minister Paulo Portas who is also head of the smaller CDS party in the coalition. Portas reportedly disagreed with the PM's decision to name Secretary of State for Treasury Maria Luis Albuquerque as a replacement for the FM, saying it would mean a continuation of the policies deepening the country's recession. PM Coelho said he didn't accept the resignation request and hasn't asked the President to dismiss Portas due to the minister's importance in the coalition.
Portas did not say whether he would take his junior party out of the government - a step that would leave the government without a parliamentary majority. Portuguese bond yields added 33bp yesterday to 6.72% and are now up more than 140bp since the May lows. The PSI equity index finished 1.3% weaker.