Last October, I highlighted the issue of bailout extensions to Ireland and Portugal and so I want to re-visit this theme now that Portugal and Ireland are in the news looking to change the terms of their existing bailouts.
Here's the issue: Ireland and Portugal received Troika bailouts about two years ago. Ireland was first in late 2010, followed by Portugal in mid-2011. The question for both nations has always been whether they would be able to regain market access within the three year time frame in Troika programs that would allow them to self-finance on public debt capital markets. To wit, in downgrading Portugal two months after its bailout, Moody's wrote:
The following drivers prompted Moody’s decision to downgrade and assign a negative outlook:
1. The growing risk that Portugal...
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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.