Mired in the worst recession since the 1970s, Portugal's governing coalition is going to turn up the austerity dial even higher. The goal is to reduce the Portuguese deficit to 4.5% of GDP in 2013 in order to be in a position to switch out of the present 78 billion euro bailout facility that is expiring and access market funding in conjunction with the ECB's new outright monetary transactions programme. Under the OMT, Portugal would move from its present Troika program to one in which Portugal would be able to issue debt to the public markets, with any shortfall at auction up to 3 years' maturity bought by the ESM bailout facility. The ECB would buy Portuguese bonds in the secondary market in potentially unlimited quantities to ensure that yields remain low.
However, as I reiterated yes...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.