Portugal on brink of collapse sparking fears the country will not be able to meet terms of its £64BILLION bailout. Portugal's main stock index plunged by more than six per cent this morningThe fall follows calls for Prime Minister Pedro Passos Coelho to resignTwo key figures in the coalition government quit in austerity measures rowMr Passos Coelho has vowed to fight to keep the coalition alive By Steve Nolan Published: 12:14 GMT, 3 July 2013 | Updated: 14:57 GMT, 3 July 2013 Defiant: Portugal's Prime Minister Pedro Passos Coelho defied calls for him to resign last night following the resignation of several key coalition government figures in a row over austerity measures Portugal's financial markets nosedived today amid fears that repayments on its £64billion bailout could soon become unsustainable as the government looked set to collapse following a spat over the country's austerity programme.
Share prices dropped by around six per cent in early trading alarming investors and reigniting concerns that the eurozone's strategy for dealing with the financial crisis is flawed. 036, de Juan Fernando Andrés Parrilla y Esteban Roel García Vázquez. Portugal shows its resistance to reform as its economic depression deepens. Over the weekend the mainstream media caught onto the fact that there are serious problems in Portugal and her economy. The trigger for this is that the constitutional court had late on Friday rejected some 1.3 billion Euros of the government’s planned austerity measures. This is not the first time that the constitutional court has challenged the austerity programme and it is the nearest to an opposition to Euro area austerity that Portugal’s authorities have. This is because her political class has in effect delegated its authority to the troika (European Commission,European Central Bank and International Monetary Fund) and their role has simply become to implement what they are told.
Indeed let me demonstrate that by jumping ahead in the narrative by quoting from last night’s European Commission statement on this issue. The Commission reiterates that a strong consensus around the programme will contribute to its successful implementation. If that does not say do as you are told! Portugal’s economic situation illustrates the intellectual bankruptcy of Euro area austerity.
Today is an epoch making day for the Euro area as it is the one where it is officially confirmed that it is no longer a single currency. The imposition of official capital controls in Cyprus where individuals can only withdraw 300 Euros per day and need central bank permission for any transaction over 5000 Euros means that a Cypriot Euro will be worth less than one elsewhere in the “single” currency.
Of course this only confirms the unofficial situation which has been true for nearly a fortnight but soon there will be a black market exchange rate. On that subject here is a thought for you, if it implies a loss of more than 6.75% on a Cypriot Euro (which on past history is likely) then some at least will have preferred the original deal. However my concentration today is much further to the west geographically as Portugal must be observing these scenes with some chagrin.
What are the prospects? The latest quarterly bulletin from the Bank of Portugal tells us this. What about house prices? Pain bites into Portuguese life as crisis deepens. LISBON, Portugal (AP) — Serving a frugal lunch in their kitchen not much bigger than a bathroom, Pedro and Elena Baptista spoon stewed chicken feet onto their boiled potatoes and leave the slightly meatier wings for their 12-year-old daughter, Vania, and 7-year-old son, Joao.
The Baptista family counts itself among the casualties of an unrelenting financial crisis that is squeezing the life out of some European Union economies, including Portugal. Pedro Baptista, a stocky 37-year-old, has found work as a part-time window cleaner but his wife Elena, 35, has been on welfare for almost a year after losing her job in a school canteen. Scraping by on a monthly household income of €650 ($840) and constantly going cap-in-hand to charities and family members has sapped their confidence. But Pedro is determined to stay positive. "Ups and downs are part of life. Exactly how long is hard to say, however, as Portugal's prime minister warns his nation to harden itself for more austerity. Angela Merkel: Portuguese anti-austerity protesters demonstrate against 'Frankenstein' policies with Nazi jibes.
Demonstrators wore T-shirts saying 'Adolf Merkel' and including a swastikaSigns say 'Merkel Nazi, Go Away! ' and, in German 'Merkel Raus' (Merkel Out)German Chancellor arrived in Lisbon to renew endorsement of spending cuts and tax increases Local newspaper says measures have 'made a Frankenstein out of Portugal' By Daily Mail Reporter Published: 19:17 GMT, 12 November 2012 | Updated: 07:57 GMT, 13 November 2012 Angela Merkel was greeted with Nazi jibes from protesters in Lisbon today as she arrived in the Portuguese capital to advocate the benefits of austerity and economic reforms.
As with her recent trips to bailed-out Greece and debt-stricken Spain, demonstrators unhappy about tax hikes and pay cuts devised to improve public finances turned their anger on the German leader. Portugal needed a 78 billion euro ($99 billion) rescue package last year when it was engulfed by the eurozone's debt crisis and living standards have dropped sharply. Scroll down for video. Portugal to need "debt haircut" as economy tips into Grecian downward spiral.