Posted on 04/16/2011 3:53:09 PM PDT by TigerLikesRooster
APRIL 14, 2011, 2:36 A.M. ET.
Portugal Bailout Could Be "Bottomless Pit", Risks Spreading To Spain-Ifo Head
By Tom Fairless
Of DOW JONES NEWSWIRES
FRANKFURT (Dow Jones)--The bailout of Portugal could become a "bottomless pit" for euro-zone states, and the crisis risks spreading to Spain because of local banks' involvement in Portugal, the head of Germany's Ifo research institute said in an interview this week.
Germany's government is likely to lose much of the "several hundreds of billions of euros" it has provided to struggling peripheral euro-zone states through European Union and International Monetary Fund rescue packages, as well as European Central Bank policies, Hans-Werner Sinn, President of Ifo, said.
"I'm afraid Germany will not get much of that money back, and will in the end be forced to add it to its national debt," he said.
Asked about the risks of a bailout for Portugal, Sinn warned that the situation there "is very similar to that in Greece" because of the country's wide current account deficit and negative savings rate.
"It could be a bottomless pit," he said. "Markets believe a Portuguese default is becoming more probable."
Portugal began talks Tuesday with delegations from the International Monetary Fund and the European Union to lay the groundwork for talks on an estimated three-year, EUR80 billion bailout package
(Excerpt) Read more at online.wsj.com ...
P!
From what I read yesterday, a lot depends on the Finland election which I think it tomorrow. If the Finns elect a government that doesn’t support bailouts, all bets are off. National defaults will hurt the entire EU and force the banks to restructure again, slowing growth for all. SO they will try to kick this can down the road as long as they can.
14 Trillion????? Time to start arresting our govt, for failing to uphold the constitution, and theft from our posterity.
When and not if, these European states fail it will affect us in the USA.
It might be the tipping point for the Bond markets to collapse and away we go.
I highly recommend this book
Thanks TigerLikesRooster.
No one wants to talk about what it is going on in Spain. I think sooner or later this will have to change.
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