Stricken Portugal ‘lacks the cash to meet debt payments’
Portugal insisted it could cope with looming debt repayments, after analysts warned it does not have enough money to meet its obligations. —
By Emma Rowley
The debt-laden nation faces around €9bn (£7.9bn) in bond redemptions by June, but currently has no more than €5bn in cash, analysts at Barclays Capital estimated.
“Portugal needs to find financing in the coming weeks in some way,” they said, suggesting credit lines or some sort of bridge loan. “In our opinion, Portugal is likely to find financing, but it is not in a comfortable position.”
Portugal denied that it could not afford to pay off its debt.
Carlos Costa Pina, the country’s treasury secretary, told Bloomberg: “Portugal has conditions to face up to the debt redemption commitments scheduled for 2011, especially the redemptions of long-term debt that will take place in April and June.”
However, Portugal’s 10-year bonds are trading with yields at euro-era highs of over 8pc, as investors demand more reward for taking on the risk.