Saturday, April 9, 2011

Having resisted financial-market pressure for months, Portugal has finally requested an International Monetary Fund (IMF) and European Union bailout.

The emergency loan, believed to total around 75 billion euros, comes three weeks after the country’s prime minister, José Sócrates, resigned following parliamentary rejection of his government’s proposed austerity measures.

Following recent sovereign debt crises in Greece and then Ireland, the Portuguese government’s actions have attracted harsh criticism in the European press. Applauding the request for foreign assistance, Britain’s The Guardian nonetheless lambasts Mr Sócrates for the tardiness of his decision. The British newspaper described Portugal as “the financial-market equivalent of a dead man walking” in an editorial dated April 7.

In Portugal, Público observed that “it will not be easy to accept more austerity, but it will be impossible to accept any more demagoguery, denial of reality, political incompetence or irresponsibility”.

The National Daily noted, however, that the “return of the IMF represents a stinging defeat for Portugal”. Indeed, the political intransigence since Mr Sócrates’s resignation on March 23 was widely viewed as doomed to failure from the outset. The Portguese request, pointed out Spain’s El País, “surprised no-one, but [had] been delayed for political reasons”.

These latest developments will no doubt fuel further criticism of the single currency. In Austria, Vienna’s Der Standard labelled the euro a “deceitful entity”, mocking the claim by European leaders that “States bailed out using taxpayers’ money will be able to repay their debts with restructuring”.

There have been widespread claims that a will to protect the euro has led Brussels to unduly downplay the gravity of the sovereign debt crisis sweeping the continent.

The emergency loan is expected to be delivered before Portuguese elections on June 5.