Portuguese Parliament Rejects Austerity Plan, PM Socrates Resigns

[Pale Blue Dot]

Source: Forbes

Portugal’s government rejected Prime Minister Jose Socrates’ fourth wave of austerity plans just after the bell on Wednesday. Socrates who had threatened to resign if opposition Social Democratic and Communist parties didn’t pass his austerity package, presented his resignation to the country’s president, setting the stage for Portugal to tap ESFS bailout funds.

Socrates’ resignation leaves behind a political vacuum that is sure to difficult any negotiations with the EU as to a rescue package. Yields on benchmark 10-year Portuguese bonds jumped 35 basis points through the day’s session as the cost to insure against Portuguese default, as measured by credit default swaps, gained 10.5 basis points to 544.5, its highest level since they reached a record 555 on January 10, according to Bloomberg.

The discussion will surely now turn to the European Financial Stability Facility (EFSF), which presumably Portugal will be forced to tap. On Tuesday, JP Morgan Chase’s Nicola Mai anticipated that the “likelihood that the Portuguese government t will fall this week looks high” while noting that “the sovereign will likely access the EFSF in the near term, despite the current government’s efforts to avoid this outcome.”

While the IMF announced it had not received any requests from Portugal for financial assistance, it is expected that whoever takes the reins in Lisbon will have to negotiate with both the IMF and the EU. Plans to restructure Europe’s bailout fund to give it more firepower were delayed on Wednesday to June due to elections and “internal procedures,” according to Bloomberg, adding market uncertainty. Speaking on condition of anonymity, a European official said the EU was committed to boosting the EFSF’s lending capacity to €440 billion ($622 billion).

Read more: http://blogs.forbes.com/afontevecchia/2011/03/23/portuguese-parliament-rejects-austerity-plan-pm-socrates-to-resign/

[David__77]

1. Neo-liberal right-wing socialists deserved to get defeated.

Viva o PCP!

[bluedigger]

2. He could always threaten to drink hemlock.

:hide:

[No Elephants]

3. The rest of the world protests cuts; Americans quiver in fear, then go

through anger, denial and the other stages of grief until they get to acceptance.

[stockholmer]

4. +1 I truly hope that all on here are deeply studying the models of IMF 'austerity' being forced down

the sovereign nations of the EU collective throats. The only nation to successfully fight back so far is Iceland, and their model of resistance is the only way out. They are also the only nation so far that is actively arresting and prosecuting the banksters who are systemically creating this global oligarchic ponzi scheme.

Now, to what the USA should be taking copious notes on.

Again, the IMF and ECB imposed austerity programmes introduced in Greece, Ireland,(soon to be Portugal, Spain, and Italy, if they don't resist) as well as preemptively in many other EU nations, would make the Koch Brothers blush.

In some cases, you are talking about 30 to 50% reductions in broad governmental areas, such as education, medical, infrastructure, local police services, food safety, etc etc etc.

What prompted the protests in Wisconsin and other states, in terms of percentage cuts, and especially the cuts being debated at USA federal level, would make the 'PIIGS' nations thank their lucky stars they got off so easy.

For example, the Republicans in the house are talking about $50 billion a year in cuts. Even the slash and burn anti-statists such as Rand Paul talk about $500 billion year in cuts, and 90% of the USA thinks he is a madman.

Well, to equal, percentage wise, what Greece and Ireland are, at the end of the day,going to have carved out, at banker gunpoint, the USA is looking at cutting between $1 TRILLION, and $1.3 TRILLION a year.

If any of the EU resists, the banksters simply attack their sovereign bond markets, forcing yields up, and making it so expensive to borrow any money, they will collapse if they don't submit to the banker's yoke.

Here is a perfect example of this
"Irish 10 Year Bonds Take Out Stops, Yield Surges Past 10% For First Time In History"

http://www.zerohedge.com/article/irish-10-year-bonds-take-out-stops-yield-surges-past-10-first-time-history



THIS is what is coming to the USA, unless you smash the current central-bank run global monetary system, as you are the biggest debtor nation in the history of the world.

As soon as a viable alternative to the daily US treasury bond market emerges, (the only thing keeping the US dollar as reserve currency, as this market can handle at least $1 quadrillion dollars US a day in liquidity transactions), the banks will start a run on selling US treasuries, China, and Japan are already selling, and the yields will explode. The US Federal Reserve, which has already debased your dollar so much, will have to raise rates to such levels that the economy collapses (remember, between borrowing and debt service, you spend $2 trillion a year (try $4 or 5 trillion a year with a 7 or 9% basis point discount rate), just like the PIIGS, but played out on a grand, global, volatile chessboard of empiric proportions.

[abelenkpe]

5. bah hate zerohedge

There are too many articles cheering on austerity there.

But you are right. I hope people are paying attention to this issue.

Iceland is the way to go. Wish other nations would do the same.

Check out nakedcapitalism.com for a saner blog if you like.

[stockholmer]

7. yes, I visit nakedcapitalism.com too, the ZH was handy,and I really dont get a 'pro-austerity' drift

from ZH at all. I despise the Fed, BIS, IMF, ECB, etc, and they defo give that angle in spades.

"The Failure to Stand Up to Evil Leads to Insanity, Poverty and the Loss of All Our Rights" is a ZH headline post
http://www.zerohedge.com/article/failure-stand-evil-leads-insanity-and-loss-all-our-rights


the sourcing and logic would fit in here quite well, IMHO



cheers!
:hi:

[LarryNM]

6. Actually All Any Nation Need do is Print the Equivalent of Greenbacks

Nationalize whats needed as it is needed and back it up with whatever kind and amount of force is necessary.

[VermeerLives]

8. So will Portugal now be forced to accept aid

and the terms which have chained Greece and Ireland? Maybe this won't affect the stock market at all, unless Spain follows.

[tama]

9. What will Finland do?

Finnish people are very much opposed to giving more aid to troubled EU countries and there is election coming. If Finland torpedoes aid packages, how will the market react and could the chain reactions lead to fall of euro (good riddens IMO)?

Don't know but this is getting interesting...