The Corner

Portugal Goes Greek

News from the land of pan-European coinage. The downgrading of Portuguese debt by Moody’s, reported here by the BBC, doesn’t seem to have had much effect on the Greek bond sale that followed the Portuguese news by a few hours. The BBC says the Greeks have six months to pay back the new debt.

It had sought to raise 1.25bn euros (£1.05bn; $1.58bn), but the offer was oversubscribed, with bids totalling 3.6bn euros.

Greece must repay the bonds after six months, with a return rate of 4.65%, which is lower than IMF loans….

Greece abandoned plans to sell 12-month bonds, which would probably have been seen as riskier.

Analysts said that because the bonds sold had a very short maturity, the sale was not a good indication of how much faith investors had in Greece’s long-term prospects.

The country is trying to reduce its public debt over the next 36-48 months through austerity measures – mostly cuts in pay to bureaucrats and other government employees, maybe a tax hike or two, hacking away at plush pensions. It remains to be seen what the firebombing borrowers in the streets of Athens will say about all that.

The Portuguese routinely fill in the bottom rung of most EU rankings on most things. This they know themselves, since they enjoy the unique advantage of having a man named Socrates as prime minister. So putting the nation on a Greek austerity slide probably won’t come as a surprise to many of them. In fact, according to the Wall Street Journal, they’re already doing the demo dance in the streets of Lisbon.

Denis Boyles — Dennis Boyles is a writer, editor, former university lecturer, and the author/editor of several books of poetry, travel, history, criticism, and practical advice, including Superior, Nebraska (2008), Design Poetics (1975), ...

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