Greek Swap Success Shifts Spread Bettor Attention to Portugal

By mosesbet · Filed Under Market News, News Comments Off on Greek Swap Success Shifts Spread Bettor Attention to Portugal 

Greek officials have been quick to point out the seeming success of the bond swap deal that is expected to give the nation a leg up from the red. In fact, official reports state that the 95% participation target has been met and a good number of private creditors have given their willingness for the bond swap.

The import of this statement is that the participation is voluntary. Given these happy tidings, spread betting traders are switching attention to Portugal as their new hunting grounds.

Why Portugal?- The Million Euro Question

Why is Portugal drawing all this attention now, is a question that some traders may have. After all, there are other Eurozone nations in trouble too. In Portugal, zooming borrowing costs are forcing the government and the public to wonder whether this country can trigger off a second crisis in the entire European Union. The Greek problem may have shifted to the back burner for now but this country has not regained enough stability to hold its own if Portugal weighs things down in this region of the world.

Banks Looking for More Funding

The fact that European banks are looking for more funding from the ECB emergency funding program show that the financial situation is far from being healthy. Reports have been floating around that the banks hope to ask for twice as much as was supplied last month. Clearly banks are severely lacking liquidity as of now. Borrowing is only going to become more expensive and more difficult to get as time goes by.

Hard-line Stance by Germany Adds to Fears

To add to the growing fears about the financial fate of Portugal, Germany’s hard- lined stance asking for a European austerity commissioner to be in charge of the Greek budget has not helped any. Although this demand does not directly involve Portugal, the shocked reaction from other Eurozone nations to this stance has undermined cooperative efforts. According to Jacques Cailloux (RBS), any such aggression that forces Greece to exit the EMU will have a chain reaction that will impact other countries such as Portugal too.

 

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