30/3/2011 00:00:00
Standard & Poor’s cut its rating on Portugal and Greece (‘BB-‘ and ‘BBB’) explaining that the summit of European leaders on March 25 has effectively opened the road to the restructuring of sovereign debt as ”one of the possible preconditions for ESM aid from the fund”, the European Stability permanent fund mechanism to be triggered in 2013.
The move by S&P did not come unexpected, but rather, especially in the case of Portugal, it sounds like the certification of the collapse of the country, even overwhelmed by the political crisis, and have been revised to worse estimates of the GDP 2011 with a contraction of 1.4% to see growth in 2012 of only 0.3%.
So much so that S&P sees “likely” the use of the temporary EFSF State-saving fund and then of the permanent ESM, ”given the difficult access to capital markets of Portugal and the considerable financial needs”.
There is a widespread feeling that despite the best efforts and the arsenal of measures deployed by the EU and the ECB, the debt crisis is still unmanageable and the contagion inevitable.
