Euro Zone Support for Portugal Debt Relief
 

Euro Zone Support for Portugal Debt Relief

on

  • 521 views

As the Greek debt dilemma finds resolution, currency traders wonder if there will be similar Euro Zone support for Portugal debt relief. ...

As the Greek debt dilemma finds resolution, currency traders wonder if there will be similar Euro Zone support for Portugal debt relief.
Both Greece and Portugal are part of the so called PIIGS group.
Portugal, Italy, Ireland, Greece, and Spain all have been in danger of defaulting on their national debts.
The situation was sufficiently bad in Greece that it required the largest government bailout in history, cobbled together by the various solvent members of the Euro Zone, the European Central Bank, and the International Monetary Fund.
In addition, private investors in Greek bonds took a fifty percent reduction in bond value and gave Greece longer to repay in return for the country not simply refusing to pay.
The problem for the remaining PIIGS nations will be getting credit at reasonable rates.
Anyone buying Portuguese bonds may be thinking that in return for a few percent interest each year they will be running the risk of having their bonds written down by fifty percent or losing their investments completely.
Euro Zone support for Portugal debt relief will be important in the country is to avoid the debt default that many feared for Greece.
Then traders will want to consider what the Euro Zone bailout package consequences will be for other nations.

Portugal, Recession, and Its Debt Burden
The country of Portugal has a continuing recession with a one percent drop in GDP in 2011.
It is expected to have as much as a four percent drop this year and perhaps another two percent in 2013.
With the Greek scenario as a backdrop, Portugal will have trouble finding any private lenders to help it out.
Although economists expect Portugal to emerge from its recession within five years, that does not encourage investors at this point.
Thus Euro Zone support for Portugal debt will be critical in the coming years. If the solvent so called core group of European Union nations are willing to support Portugal in the coming years it will likely emerge more fiscally sound.
However, it will probably not get any debt relief from European Central Bank loans but rather need to pay back every Euro.
In addition, the austerity measures taken on by nations across Europe may well lead to a recession in the European Community in the year or so to come.
This would simply make things worse for Portugal and the other nations struggling with their debt burdens.
Trading the Euro
It appears that the European Union is not going to break up, as some feared a year or more ago.
However, fears of a “domino effect” of debt defaults from Italy to Spain to Portugal to Ireland and back to Greece still concerns traders and investors.
The answer for the currency trader, in this situation likely lies in how the European Central Bank is dealing with the generalized debt dilemma.

Statistics

Views

Total Views
521
Views on SlideShare
521
Embed Views
0

Actions

Likes
0
Downloads
1
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Euro Zone Support for Portugal Debt Relief Euro Zone Support for Portugal Debt Relief Presentation Transcript

    • Euro Zone Support for Portugal Debt Relief www.TheForexNittyGritty.com
    • To see a complete version of this presentation and to obtain our free EBook follow this link: http://portal.sliderocket.com/BLOUC/euro-zone- support-for-portugal-debt-video-versionRead the Forex Conspiracy Report for insights into trading foreign currencies. Get your copy athttp://portal.sliderocket.com/BLOUC/euro-zone- support-for-portugal-debt-video-version www.TheForexNittyGritty.com
    • As the Greek debt dilemma findsresolution, currency traders wonder if therewill be similar Euro Zone support for Portugal debt relief. www.TheForexNittyGritty.com
    • Both Greece and Portugal are part of the so called PIIGS group.Portugal, Italy, Ireland, Greece, and Spain all have been in danger of defaulting on their national debts. www.TheForexNittyGritty.com
    • The situation was sufficiently bad in Greece that it required the largest government bailout in history, cobbled together by the various solvent members of the Euro Zone, the European Central Bank, and the International Monetary Fund. www.TheForexNittyGritty.com
    • In addition, private investors in Greek bonds took a fifty percent reduction in bond valueand gave Greece longer to repay in return for the country not simply refusing to pay.The problem for the remaining PIIGS nations will be getting credit at reasonable rates. www.TheForexNittyGritty.com
    • Anyone buying Portuguese bonds may be thinking that in return for a few percentinterest each year they will be running therisk of having their bonds written down by fifty percent or losing their investments completely. www.TheForexNittyGritty.com
    • Euro Zone support for Portugal debt relief will be important in the country is to avoid the debt default that many feared for Greece. www.TheForexNittyGritty.com
    • Then traders will want to consider what theEuro Zone bailout package consequences will be for other nations. www.TheForexNittyGritty.com
    • Portugal, Recession, and Its Debt Burden The country of Portugal has a continuingrecession with a one percent drop in GDP in 2011. www.TheForexNittyGritty.com
    • It is expected to have as much as a fourpercent drop this year and perhaps another two percent in 2013. With the Greek scenario as abackdrop, Portugal will have trouble finding any private lenders to help it out. www.TheForexNittyGritty.com
    • Although economists expect Portugal to emerge from its recession within fiveyears, that does not encourage investors at this point. www.TheForexNittyGritty.com
    • Thus Euro Zone support for Portugal debt will be critical in the coming years. If the solvent so called core group of European Unionnations are willing to support Portugal in the coming years it will likely emerge more fiscally sound. www.TheForexNittyGritty.com
    • However, it will probably not get any debtrelief from European Central Bank loans but rather need to pay back every Euro. www.TheForexNittyGritty.com
    • In addition, the austerity measures taken on by nations across Europe may well lead to arecession in the European Community in the year or so to come. www.TheForexNittyGritty.com
    • This would simply make things worse forPortugal and the other nations struggling with their debt burdens. www.TheForexNittyGritty.com
    • Trading the Euro It appears that the European Union is notgoing to break up, as some feared a year or more ago. www.TheForexNittyGritty.com
    • However, fears of a “domino effect” of debt defaults from Italy to Spain to Portugal to Ireland and back to Greece still concerns traders and investors. www.TheForexNittyGritty.com
    • The answer for the currency trader, in this situation likely lies in how the EuropeanCentral Bank is dealing with the generalized debt dilemma. www.TheForexNittyGritty.com
    • The European Central Bank seems to be following the lead of the United States Federal Reserve in that they are printing money in order to pay off debts, prop upbanks and the credit system, and stimulate the various economies. www.TheForexNittyGritty.com
    • This approach may well pay off in pulling the Euro Zone out of its economic funk. However, the cost could well be a devalued Euro.However, if you expect to see a fall in tradingthe Euro, look at who else is printing money to stimulate economies these days. www.TheForexNittyGritty.com
    • The dollar and Yuan could fall as well.As always don’t trade currencies unless youunderstand what you are doing and always do your homework. www.TheForexNittyGritty.com
    • For more insights and useful informationregarding the Forex markets and foreign currency trading, visit www.TheForexNittyGritty.com.