Portugal´s rescue

Our neighbour are on  the verge of being rescued. Socrates, resigned PM , has call for it. (http://www.ft.com/cms/s/0/e2916ace-607e-11e0-9fcb-00144feab49a.html#axzz1IZzec400)

The rescue of Greece and Ireland have not improved the performance of these countries nor  others in difficulties. Greece must now pay a 16% for its  10 years treasury bonds.

The rescues have been  a flawed way to protect the assets of euro banks, loaded with sovereign bonds. But this attitude has impeached to remove the bad assets of european banks, which in turn has delayed the last solution of  bank problem.

Three years ago, the solution would have been to emerge bad assets and some hair cut to the creditors. Now, the hair cut will  be much more hard, in spite of which the rescue only translate the problem to the future, and volume.


About miguel navascues
economist. 30 tears in the Bank of Spain following US´ and other economies.

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