The Son of Finance of the Great Age

  Chapter 829 Portugal debt crisis (1)

  Although Zhongshi made it clear that he would not participate in speculation against Portugal, this does not mean that the Paulsons who were already greedy for profit did not participate, and they soon took action against the Portuguese government.

  At the end of December, near the New Year, Fitch lowered the sovereign credit rating of the Portuguese government, sounding the rallying call for the market to besiege Portugal.

  In January, in response to market doubts about Portugal, the Portuguese government publicly issued a new bond, with the purpose of showing the market that the Portuguese government is confident in its ability to save the current economy. The debt totaling 2 billion euros attracted subscriptions from more than 50 banks around the world, and the result of the final auction was that the interest rate was set at 4%.

   This news immediately stabilized the market, and the interest rate on Portugal's 10-year government bonds dropped from 6% to around 4%. Everything looked so good. Although the market is full of doubts about the Portuguese government, the Portuguese government responded to all the rumors with a resounding slap. At least until now, they still have sufficient credibility in the international market.

   Zhong Shi, who has been observing the situation in Europe with a cold eye, is very clear that this is at best a reflection of the Portuguese government, because Paulson and others will continue to release big moves in the future.

Sure enough, in February, Goodman Company released an analysis report on Portugal's domestic economic situation. In the report, they stated convincingly that the national debt of the Portuguese government has accounted for 92.4% of Portugal's GDP. Since the last disclosure, it has risen by a full 10 percentage points.

  Stanley also issued a similar report at the same time, with a stronger warning. They directly stated that due to reasons such as sluggish economic growth, a large number of foreign capital fleeing, high unemployment rate, and increasing public welfare year after year, the debt scale of the Portuguese government will soon exceed 100%.

  At the end of the article, the analysts of Stanley Company pointed out unabashedly that after experiencing the debt crisis in Greece, Ireland and other countries, Portugal has undoubtedly become the third market that has attracted the attention of the world. Although they had previously successfully issued new bonds, this was nothing at all. If they can't quickly and effectively turn around the domestic economic situation, then they are a second Greece, a second Ireland. Maybe next week, maybe tomorrow.

  As soon as the two analysis reports were released, they immediately caused an uproar in the market.

  The crisis that the Portuguese government had managed to suppress immediately surfaced again, and the yield on the 10-year government bond rose from 4% to 7% within half a month, staying at a high level again.

   Following that, Standard & Poor's announced on the 23rd of this month its credit assessment report on the other 18 euro zone countries other than Greece. In this report, in addition to the sovereign ratings of Italy, Spain and other countries being downgraded to "negative", the most notable thing is the sovereign credit rating of Portugal, which was directly downgraded by two levels.

  Faced with this situation, the leaders of the European Union and Portugal began to speak out to the market frequently, hoping to restore a little market confidence. But unfortunately, with the lessons learned from Greece and Ireland, the market is simply indifferent to this.

Immediately afterwards, on March 1, more than 2 million people broke out in Portugal to strike and demonstrate. The reason is that in the context of economic downturn, the current government intends to reduce the fiscal deficit and increase tax revenue through measures such as tax increases and salary cuts. , Although no real resolution document appeared at this time, the labor union did not know where to hear the wind, and started a nationwide general strike without official confirmation.

  From Lisbon to Porto and then to Coimbra, angry crowds took to the streets, chanting opposition slogans and warning the government not to pay for the fiscal deficit by increasing taxes. Public facilities in the three major cities were paralyzed for a while, and airports, hospitals, schools, etc. were shut down one after another.

The strike lasted for two days. At the end of the strike, the union leaders warned: "If the government wants ordinary workers to pay for the budget deficit, the possibility of continuing the strike is not ruled out until they agree to (the union's) demands. until."

   "What do you think about this matter?"

  Silently turned off the TV, Zhong Shi took out the cigar, lit it skillfully, took a deep breath, let the aroma spread slowly in the mouth, and then spit it out slowly, enjoying the stimulation on the taste buds.

After a while, he opened his eyes and asked the silent Jiang Shan, "So far, it can be seen that the situation in Portugal is getting more and more critical. From their trading methods, what can you see? "

  “The interaction of international public opinion and internal pressure forced the Portuguese government to take the road of finally applying for rescue.”

Jiang Shan took a deep breath and said slowly, "The tricks you use are still the same as yours. I don't see anything new. But I have to say that this trick is very effective. I don't think it will be long before the Portuguese government It will be caught in a situation of external troubles and internal difficulties.”

"what about others?"

  Zhong Shi was taken aback for a moment, then immediately asked, "Didn't you think of anything else?"

"others?"

  Jiang Shan's eyes widened, and he asked puzzledly, "Is there anything else?"

   "This is actually a power struggle!"

Seeing Jiang Shan's bewildered expression, Zhong Shi couldn't help but sighed, and explained slowly, "In the 1980s, Portugal once proposed a loan to the IMF. You also know very well that the IMF's loans are very harsh. The condition is basically equivalent to giving up the country's financial power. It is precisely because of this painful experience that the current government is full of vigilance against accepting foreign dictates. Not only the government elite, but even the ordinary people of Portugal Full of resentment about it.”

"In order to cater to public opinion, the current government has emphasized several times that it will not seek outside assistance. This has the same concerns as the Irish government, because once they accept outside assistance, their status as the ruling party will inevitably be lost, and strict conditions will inevitably It will touch the interests of the general public. There is no doubt about it. It seems that the current Irish government has lagged far behind their political opponents in polls, and it must be inevitable that they will lose in the general election in May."

"The demonstration this time seems to be an accidental event, but there may not be the shadow of the Portuguese opposition party behind it. I think the biggest possibility is that the prime minister briefed in an internal meeting that a new round of fiscal austerity policies may be implemented. But until now So far, this is just an idea, which has not been officially put into writing. But even such an idea was ruthlessly leaked to ordinary people, which led to this nationwide strike demonstration.”

   "So there is such a reason?"

  Jiang Shan was thoughtful, "Portugal's political situation is no less chaotic than the Irish government. Various forces are wrestling with each other. Paulson and the others should have borrowed one of these forces. The two sides should cooperate internally and externally?"

   "I think that's the truth of the matter!"

  Zhong Shi nodded approvingly, but then asked, "Aside from joining forces in politics, what else can you see?"

"and also?"

  Jiang Shan suddenly felt a headache. Although he had learned from Zhong Shi's side for a long time, he could still feel the gap between him and Zhong Shi from time to time. After racking his brains and thinking for a while, he tentatively replied, "There is still a local conduction effect?"

"good!"

Zhong Shi smiled with satisfaction, and said, "This can basically be seen from the identity of the holder of the Portuguese national debt. In fact, in the Iberian Peninsula, Portugal's economic strength is much worse than that of Spain, so it is doomed to some of their Some of the bond buyers are from Spain."

"According to my judgment, Spanish banks hold at least more than 100 billion euros of risk-free exposure. If the Portuguese government does not choose to apply for rescue in the end, the crisis will spread to the Spanish banking industry in an instant, and then affect the entire Spain. As the fourth largest economy in the euro zone, if there is a problem, it can almost indicate that neighboring France and Italy will also be involved, because the economic entanglement between the two parties is too close."

  "If the crisis really develops to this stage, the euro zone can almost be judged as a death sentence. So in any case, the euro zone will guarantee that Portugal will accept rescue from the EU and the IMF, even if their government is unwilling."

"In this way, you can see whether it is not only the capital intervention from the United States, but also the will of several major powers in the European Union. For the current Portuguese government, the public statement and willingness show that they are unwilling to accept aid. But in fact for the For them, on the one hand, they have to alleviate the current crisis through their own efforts, and on the other hand, they have to guard against interference from domestic and foreign forces, which is far more difficult and stressful than the Irish government at that time."

"If I am not wrong in my prediction, the current Portuguese government will soon step down in this state of internal and external attack. Although this is not what they want, but they have only one way to save face and let the Portugal avoids a scenario of default."

   Zhong Shi finally said firmly.

   "You mean, their prime minister will take the initiative to choose to resign?"

  Jiangshan was startled, and asked repeatedly, "On the one hand, they promised the Portuguese people that they would not accept outside assistance, and on the other hand, they were unable to solve the problem by themselves. Is the final way to choose to step down in a helpless way?"

   "You're right, but it's just an appearance!"

Zhong Shi snuffed out the cigar in his hand, and analyzed calmly, "But in fact, the current Portuguese government has to choose to give in to the pressure of reality. But in order to tell the world that they did not give in because of this pressure, in the end There must be a step down. Yes, this is how things develop!"

  Jiangshan was dumbfounded and speechless.

  …

  Twenty days later, the development of the situation in Portugal was just as Zhong Shi expected, and it was getting out of control step by step.

   On the 20th, the current Portuguese government proposed a budget plan known as the most stringent in 30 years, in order to cope with the current market doubts about Portugal.

In this budget plan, civil servants with a monthly salary of more than 1,500 euros will reduce their salaries by 5%, freeze the pension of the whole society for two years until 2013, increase sales value-added tax by two percentage points, and reduce the operating and management costs of the state-run medical system. It has been thrown out one after another, covering many fields such as the health sector, state-owned enterprises, employment, social welfare and capital expenditure.

  According to the public information of the Portuguese government, this plan is to reduce the fiscal deficit from 7.3% in 2010 to 4.6% this year, and reach the red line of 3% required by the EU in 2013.

  As soon as the budget came out, it immediately caused an uproar. The cheese that has touched so many departments, especially the measure of freezing the pension fund, has touched the nerves of all Portuguese.

  But the ruling party’s response to this is more tough, and it seems to regard everyone as an enemy.

Among them, Portuguese Finance Minister Santos warned in the parliamentary debate that if the Congress rejects the austerity plan, the risk of Portugal's sovereign credit rating will rise sharply, which will increase the country's financing costs, and eventually Portugal may default on bonds due in April and May. , Since then, it has completely lost its trust in the international market.

  Portuguese Prime Minister Socrates even publicly stated, "If the opposition party does not approve the new fiscal austerity policy, he will immediately choose to resign."

   Thanks to book friends such as Electromagnetist, Xiao Shuili, Ruanyi, Shen Zixuan, Lao Nafahao Takong, Demon Dragon and War Ghost, etc. for voting monthly! Thanks to the book friends, he entered her heart and broke my heart, jrjmtdmw for their rewards! Thank you for your strong support, which gave the author a lot of motivation. I hope more book friends can continue to vote actively ~ Thank you very much ~

  (end of this chapter)