The dam breaks in Portugal
By Ambrose Evans-Pritchard
January 11th, 2011
Those of us chained by journalistic destiny to the eternal EMU crisis remember the exact moment when Ireland succumbed.
Premier Brian Cowen was still insisting that his government was fully funded for months to come and had no need whatsoever for an EU-IMF loan package when the central bank put a swift stop to the charade.
The moment that Governor Patrick Hohonan said he “absolutely” expected his country to accept a loan package worth “tens of billion”, it was over.
So I had a sense of deja vu this morning when Teodora Cardoso, the Adminstradora of the Banco de Portugal, blurted out in a conference that her country should turn to the IMF. “It would be easier if we had external support because the adjustment would be less abrupt: if we leave it to the markets it may be brutal,” she said. (My loose translation).
Here is the Portuguese version from Economico for Lusophiles: “É mais fácil se tivermos um apoio externo, desde logo porque isso permite que o ajustamento não seja tão abrupto, mas feito sozinho, para os mercados acreditarem nele, teria que ser brutal. Com o apoio de uma dessas instituições (FMI ou Fundo Europeu) poderá ser menos abrupto”.