Portugal

Portugal's banks have set aside enough money to cover bad debts and are holding enough capital to weather any deterioration of their loan portfolios, the country's central bank said Friday, summing up its review of their loan books, The Wall Street Journal reported. Bank of Portugal said the group of eight lenders had a core Tier 1 capital ratio of 11.2% as of April 30, above the 10% minimum established by the bank.

Portugal’s ruling coalition and main opposition party will attempt this week to hammer out a “national salvation” pact aimed at overcoming a political crisis that could bring down the government and derail the country’s €78bn bailout programme, the Financial Times reported. In response to a call from President Aníbal Cavaco Silva, the three parties have set themselves a deadline of July 21 for reaching an agreement that will commit future governments to the tough fiscal discipline required to keep the programme on track.

Portugal’s government almost disintegrated last week but has now managed to shore up its support, bringing some calm to the country’s bond market. But the political chaos could still have far-reaching implications, the Financial Times reported. Its chances of regaining full market access now look much slimmer. That means the country will need more money from its troika of international lenders. But that could lead to a debt restructuring – potentially upsetting the tentative peace that the European Central Bank has brought to the continent’s bond markets.

Brussels is preparing a second bailout package for Portugal, according to reports. The European Commission wants to have the so-called “soft rescue” ready for when Portugal’s current bailout expires in the middle of next year, according to an article in Spain’s El País newspaper. The paper cites two unnamed “senior EU sources” as confirming that Lisbon is already negotiating the details of a second credit line, which would come from the European Stability Mechanism.

Portugal's embattled prime minister said he had reached an understanding to keep his government from collapsing, but only after four days of political tremors highlighted the biggest flaw in Europe's strategy for reviving crisis-hit euro members: It isn't working, The Wall Street Journal reported. Prime Minister Pedro Passos Coelho said he had received assurances Thursday of continued backing of the Democratic and Social Center Party, the junior partner in his center-right coalition, despite the resignation of its leader, Paulo Portas, as foreign minister. Mr.

Vítor Gaspar, Portugal’s finance minister and the chief strategist behind the country’s €78bn bailout programme, has resigned in a surprise move that highlights the unpopularity of the government’s tough austerity measures. Mr Gaspar, formerly a Brussels-based economist with no previous political experience, is to be replaced by Maria Luís Albuquerque, currently treasury secretary, the office of President Aníbal Cavaco Silva said on Monday, the Financial Times reported.

A nationwide strike froze public-transport services, shrank hospital staffs and kept many public offices shut across Portugal on Thursday amid a growing consensus among workers and businesses that austerity has reached its limit, The Wall Street Journal reported. Protests and strikes have become common since Prime Minister Pedro Passos Coelho's government took over in mid-2011 to implement measures to control the country's spiraling deficit under a €78 billion ($101.49 billion) bailout from the European Union, the International Monetary Fund and the European Central Bank.

Portugal is at the forefront of Europe’s latest baby bust, one that is shorting the fuse on a time bomb of social costs in some of the world’s most rapidly aging societies, The Washington Post reported. As in many corners of the industrialized world, Europe has faced a gradual decline in birthrates since the 1960s. But in a number of the region’s hardest-hit countries, a modest rebound during the 2000s — when European governments welcomed immigrants and rolled out cash benefits for young couples starting families — has now gone into reverse.

Less than a year before European leaders hope to chalk up success for their handling of the sovereign debt crises in Ireland and Portugal, rising bond yields and long-term interest rates are causing concern over how the two countries will exit their bailout programmes, the Financial Times reported. Amid expectations that central banks in the US, Japan and elsewhere will tighten monetary policy, yields on Portugal’s benchmark 10-year bonds surged to 6.6 per cent last week from a low of 5.2 per cent in late May.

The Portuguese government confirmed Thursday that it will impose spending ceilings on all ministries, cut public-private partnership contracts and increase working hours in the public sector to save on overtime pay to meet a budget-deficit target of 5.5% of gross domestic product this year, The Wall Street Journal reported. "Like we have promised, there won't be [new] tax increases," government spokesman Luis Marques Guedes said following a meeting where ministers approved changes to the original budget plan for 2013. Mr.