Portuguese Premier Resigns After Austerity Is Rejected.
Portuguese Prime Minister Jose Socrates submitted his resignation Wednesday after parliament rejected his minority Socialist government's latest austerity measures.
The rejection "had taken away from the government all conditions to govern," Socrates said in a televised statement. He said his government would remain in power in a caretaker capacity.
The parliament's rejection of austerity measures—as well as Socrates' resignation—comes just a day before a European summit.
Socrates has said rejection of the austerity plan would force the debt-laden country to follow Greece and Ireland and seek an international bailout, which he opposes.
Brendan Keenan: Kenny will have to pull new plan out of bag as chaos descends From The Independent.ie..
ENDA Kenny packed his bags for one EU summit in Brussels, but it looks as though he will be attending a very different one.
As the old political saying has it, events have taken over. The plans of EU leaders have been thrown into disarray by even more bad news from Ireland's banks; the imminent collapse of Portugal's government; and stern resistance to bigger bailouts from those flinty Finns.
Mr Kenny's stated purpose at the meeting -- to secure a reduction in the interest rate on the €80bn EU/IMF rescue fund -- now looks irrelevant. Instead, according to reports in Brussels, there may be a special summit as early as next week just to deal with Ireland's difficulties.
The reason seems to be that new estimates for losses at the Irish banks are going to be worse than even the €35bn allowed for in the EU-IMF loan package could cover. These "stress test" figures are not due until next week, but it may be that they will render the original plan unworkable.
EU leaders to delay eurozone rescue deal From Euractiv.com. Excerpts:
A government collapse in Portugal and political tensions in other member states means EU leaders are set to postpone until June a decision to reform the euro zone and boost the bloc's bailout facility as they meet for a crucial economic summit in Brussels today and tomorrow (24-25 March).
Today's summit has long been sold as a deadline for leaders to sign off on a swathe of economic reforms including boosting guarantees for its temporary bailout fund, the European Financial Stability Facility (EFSF), which has already been used for Greece and Ireland.
It was also branded as the summit that will finalise a permanent rescue fund after 2013 - the European Stability Mechanism.
But in light of recent political developments in Portugal, Finland and Germany, both of these goals have been put in jeopardy, EU diplomats say.
And:
Adding to the euro zone's woes, Germany put the brakes on a deal for the ESM on Wednesday as it revealed it could not foot payments it had committed to make in 2013. And Finland said it would resist raising the EFSF's ceiling before elections scheduled on 17 April.
"Those providing the guarantees cannot, and those who may soon need a bailout may not be able to request one," an EU diplomat said yesterday, alluding to Finnish resistance to the EFSF and a political meltdown in Portugal preventing it from requesting a bailout.
There will be many more headlines regarding Europe's economy--soon.
Portuguese Prime Minister Jose Socrates submitted his resignation Wednesday after parliament rejected his minority Socialist government's latest austerity measures.
The rejection "had taken away from the government all conditions to govern," Socrates said in a televised statement. He said his government would remain in power in a caretaker capacity.
The parliament's rejection of austerity measures—as well as Socrates' resignation—comes just a day before a European summit.
Socrates has said rejection of the austerity plan would force the debt-laden country to follow Greece and Ireland and seek an international bailout, which he opposes.
Brendan Keenan: Kenny will have to pull new plan out of bag as chaos descends From The Independent.ie..
ENDA Kenny packed his bags for one EU summit in Brussels, but it looks as though he will be attending a very different one.
As the old political saying has it, events have taken over. The plans of EU leaders have been thrown into disarray by even more bad news from Ireland's banks; the imminent collapse of Portugal's government; and stern resistance to bigger bailouts from those flinty Finns.
Mr Kenny's stated purpose at the meeting -- to secure a reduction in the interest rate on the €80bn EU/IMF rescue fund -- now looks irrelevant. Instead, according to reports in Brussels, there may be a special summit as early as next week just to deal with Ireland's difficulties.
The reason seems to be that new estimates for losses at the Irish banks are going to be worse than even the €35bn allowed for in the EU-IMF loan package could cover. These "stress test" figures are not due until next week, but it may be that they will render the original plan unworkable.
EU leaders to delay eurozone rescue deal From Euractiv.com. Excerpts:
A government collapse in Portugal and political tensions in other member states means EU leaders are set to postpone until June a decision to reform the euro zone and boost the bloc's bailout facility as they meet for a crucial economic summit in Brussels today and tomorrow (24-25 March).
Today's summit has long been sold as a deadline for leaders to sign off on a swathe of economic reforms including boosting guarantees for its temporary bailout fund, the European Financial Stability Facility (EFSF), which has already been used for Greece and Ireland.
It was also branded as the summit that will finalise a permanent rescue fund after 2013 - the European Stability Mechanism.
But in light of recent political developments in Portugal, Finland and Germany, both of these goals have been put in jeopardy, EU diplomats say.
And:
Adding to the euro zone's woes, Germany put the brakes on a deal for the ESM on Wednesday as it revealed it could not foot payments it had committed to make in 2013. And Finland said it would resist raising the EFSF's ceiling before elections scheduled on 17 April.
"Those providing the guarantees cannot, and those who may soon need a bailout may not be able to request one," an EU diplomat said yesterday, alluding to Finnish resistance to the EFSF and a political meltdown in Portugal preventing it from requesting a bailout.
There will be many more headlines regarding Europe's economy--soon.
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