Portugal's prime minister, Mr Passos coelho 6 night announced in a press conference in Lisbon, the social Democratic Party and the coalition government led by his party headed by foreign ministry long wave, in a new coalition agreement, to ensure the country's political stability, fiscal and economic autonomy as soon as possible reply. This means that due to the continuous two ministers last week, especially the wave, quit Portugal's political crisis is resolved. Coelho's speech in the day did not disclose all the details of this agreement, the reason is that the agreement still need to get the Portuguese President anibal cavaco silva's consent.
The Portugal's political crisis in Portugal's austerity policy this month 1, one of the main makers, finance minister gaspar's resignation. The next day, because of dissatisfaction with President anibal cavaco silva to accept nominated prime minister Mr Passos coelho's new finance minister, appointed the financial secretary of state arbuckle, replace gaspar served as finance minister, foreign minister wave, also resigned. Because of the Portuguese government by the people's party and social Democratic Party coalition, if the pp withdrew from the coalition government, the social Democrats would lose their majority in congress, the President will have to dissolve parliament, early elections, so the wave of resignations leave the coalition government in jeopardy.
The political crisis exacerbated market prospects for the economy to Portugal and concerns about the European debt crisis will worsen, and lead to financial market turmoil. 3, the Portuguese 10-year bond yields rose above 8%, 75 basis points and a record high in 18 months. On the same day, Portugal's PSI 20 index fell 5.3%, its
Electronics biggest one-day fall in more than two years, and sent stocks tumbling across Europe.
Sentix 8, in addition, research institutions, according to a survey released due to the effect of Portugal's political crisis, and promoting factor of the future economic growth is uncertain, and the eurozone in July was Sentix accident weaker investor confidence index, since June fell to 11.6 to 11.6, which is expected to 10.0. After the data has been improved for two months in a row. Sentix pointed out that Portugal's political crisis is the biggest impact on investor confidence.
President of the European commission, the former Portuguese prime minister jose Manuel barroso, said Portugal's political crisis has affected investor confidence in the country's financial sector, and may bring adverse effect on the country's economic recovery. Analysts also believe that the fed will gradually shrink of quantitative easing (QE), the size of the background, Portugal's political crisis and the "troika" or deferring the concerns of the Greek bailout, will make the market risk. However, German finance minister Wolfgang schaeuble said 4, eurozone countries is not equal to the European debt crisis renewed political crisis, the market without excessive anxiety. He pointed out that the eurozone has ability to resist political unrest in individual member states of the impact of the situation.
Reviewing the Portugal's political crisis, the root cause is the country's sharply raising taxes and cutting public spending and cut sharply civil servants and other harsh economic austerity measures. Coalition government ruling for two years, Portugal's economy continues to weaken, in one's hand up and down in the implementation of austerity policies there are great differences on the issue. On the one hand, these policies caused Portuguese public strong dissatisfaction; Portugal, on the other hand, still can not meet deficit-reduction goals set by the "troika". Under pressure, the Treasury secretary, was forced to resign. Wave, foreign minister, said the newly appointed finance minister arbuckle, too close to gaspar on economic policy, and it is these fiscal austerity leads to Portugal sank into the worst recession since the 1970 s.
At present, while Portugal's political crisis has largely ended, but the crisis is still difficult to eliminate the cause. Sustained economic recession and the public dissatisfaction with fiscal austerity situation has not been reversed. Portuguese this year's economic situation is still grim, the unemployment rate is as high as 18%, 2.3% GDP growth this year will not achieve it. 5, the international credit rating agency standard & poor's company has cut Portugal's sovereign credit rating outlook from "stable" cut to "negative".
In addition, many investors believe Portugal's political turmoil is likely to impact with the "troika" of international bailout, totaling 78 billion euros and the country will be worry about exit plan as scheduled in 2014. On July 15, "troika" will embark on the next round of aid to Portugal banking audit. At this critical juncture, gaspar's resignation to rescue plan is undoubtedly a heavy blow. There, according to the analysis of Portugal hope to return to the bond market financing is not big, the mounting panic, instead of to make the country more likely to be accepted by Greek rescue for the template of the second aid, and such aid may make bond investors suffered losses.
In the next few days, Mr Passos coelho will adjust part of the cabinet members, increase the pp in the ratio of government ministers. Analysts believe that this means that the Portuguese government will likely to adjust its economic policy tightening, to ease the relationship between the government and the people. However, Portugal's road to economic recovery is still a long way to go, the reorganization of the coalition government faces huge challenges.
