Portugal Bears Brunt of Greek Contagion
Poor Portugal. The countrys bonds have borne the brunt of investor frustration over Greeces failure to reach an accord with private bondholders on writing down the value of their debt.
The yield on Portugals 10-year bond soared yesterday with investors concerned that it too would impose losses on holders of Portuguese debt in a restructuring.
I asked Prime Minister Pedro Passos Coelho last night after the European Union summit if Portugal would ever impose losses on its bondholders. He said it wouldnt for a couple of reasons, citing first the EUs statement last night that Greek situation is exceptional and unique and insisting that Portugals debt is sustainable.
Its certainly lower than Greeces. In its autumn economic forecast the European Commission projected that Portugals total debt will rise to 111% of GDP this year, compared to 198.3% for Greece, not taking into account bondholder write offs now being negotiated.
http://go.bloomberg.com/euro-crisis/2012/01/31/portugal-bears-brunt-of-greek-contagion/