Portugal

Last month’s elections in Portugal were meant to deliver a clear verdict on the center-right coalition of Prime Minister Pedro Passos Coelho, whose austerity program has been held up as a model by creditors and countries like Germany that have advocated belt-tightening in Europe, the International New York Times reported.

Just a few weeks ago, voters appeared ready to punish Prime Minister Pedro Passos Coelho for spending cuts and tax increases that drove Western Europe’s poorest country deeper into a recession to save it from insolvency, The Wall Street Journal reported. But with the economy on a slow mend, a late surge of support in opinion polls has vaulted the conservative leader several points ahead of his Socialist rival, making him the favorite in an election on Sunday that is viewed as a test case for the troubled eurozone. In the four years since Mr.

Portugal is having trouble selling the bank salvaged from the wreckage of one of the country’s biggest private lenders, the International New York Times reported. The Portuguese central bank on Tuesday missed its own deadline for selling the salvaged entity, Novo Banco, after talks with the front-running bidder faltered. The Bank of Portugal did not identify the bidder, but it has been widely reported to be a Chinese insurance and asset management company.

The Bank of Portugal is in exclusive talks with China's Anbang Insurance Group Co on the sale of state-rescued Novo Banco, leaving two other bidders on the sidelines, sources said. Two sources close to the bidding process told Reuters China's Fosun International and U.S. fund Apollo Global Management had also made binding bids and could re-enter the race if talks with privately-held Anbang fail. A Beijing-based spokeswoman for Anbang declined to comment.

Even if they had been compiled by his own spin-doctors, Portugal’s latest unemployment figures could hardly have been better for Pedro Passos Coelho, the country’s centre-right prime minister, the Financial Times reported. The last batch of labour market numbers to be published before a general election in October showed the biggest quarterly drop in the country’s jobless rate for at least 17 years — falling by 1.8 percentage points in the second quarter to 11.9 per cent.

A general election has been called in Portugal for October 4, the first of several national ballots in crisis-hit eurozone countries where images of Greeks queueing at ATMs are likely to influence the outcome, the Financial Times reported. The Portuguese election, announced by President Aníbal Cavaco Silva on Wednesday night, will be followed within months by ballots in Spain and Ireland, where the crisis in Greece could also sway voter decisions.

Three bidders have submitted binding offers for Novo Banco, the successor to Banco Espirito Santo after a state rescue last year, the Bank of Portugal said on Tuesday, without naming the institutions. A source close to Chinese group Fosun International told Reuters earlier the company had submitted its offer before Tuesday's deadline. The list of contenders shrank from five that the central bank picked in April and who had until the end of June to present binding bids.

In the eyes of international lenders, Portugal is a shining example of what Greece should have been: a bailed-out country that co-operates with its creditors, stoically enduring years of austerity to bring about reforms that gradually improve an ailing economy, the Financial Times reported. But Lisbon’s status as eurozone posterchild — cited as “proof” that adjustment programmes work by Germany’s hawkish finance minister Wolfgang Schäuble — would not be enough to shield it from the full blast of market turbulence if Greece exits the currency bloc.

Portugal’s antitrust regulator has accused 15 banks of unfair competition practices over an 11-year period in which they allegedly shared information about loan products, the Irish Times reported on a Reuters story. The country’s competition authority said it had notified the banks, which it did not name, about accusations regarding the exchange of sensitive commercial information on loans, including about intended changes in spreads. Under Portugal’s competition law, companies found guilty of cartel practices can face fines of up to 10 per cent of their business volume.

If anyone was going to blink over Greece, one might think it would be Spain or Portugal—the two countries widely considered most at risk if Greece leaves the eurozone. Indeed, both saw a slight rise in their borrowing costs last week at a particularly bleak moment in Greece’s negotiations with other eurozone members. And Goldman Sachs warned in an eye-catching report this week that if Greece does exit the euro, Spain’s borrowing costs could rise to four percentage points above Germany’s, compared with a spread of one percentage point now.