The EU/IMF/ECB troika released a statement on its second review of the Portuguese bailout this afternoon. It was more or less what was expected, with a deeper recession forecast for next year (GDP contracting by 3%) and fears over some over-spending, particularly regionally, which could result in the country missing this year’s deficit targets. Other than that it was light on detail and heavy on the platitudes as with most EU statements these days. (We’ll bring you a full analysis of the report once it is released).
But there was one interesting point which caught our eye:
“The government is seeking to negotiate a voluntary agreement with the major banks to transfer part of the assets and liabilities of these banks’ pension funds to the social security system, so as to allow meeting the 2011 fiscal deficit target of 5.9% of GDP.”
Monkeying around with private pension funds is becoming something that cash-strapped governments are starting to do. The Hungarians have done it, and so have the Argentines (Pause for a commercial: I have an article on Argentina in the latest issue of NRODT). Is it Portugal’s turn now?