Say NO to bailing out Portugal

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They ran up huge structural deficits, just like Labour in the UK - but with the additional deadening weight of the euro.

They have decided not to implement austerity measures - let them pay the price. Their borrowing rates are soaring; meanwhile in the UK, thanks to the confidence of the markets in the Osborne plan, our borrowing rates are more or less the same as Germany's.

The Portuguese have choices. They can leave the euro, for example, and naturally devalue until they become competitive. If their politicians choose not to leave the euro, let the people of Portugal who elect them pay the price - certainly not British taxpayers.

Write to your MP TODAY to insist we don't bail out Portugal!

Yeah sorry, I know about Darling signing us up. What I mean is we should turn around and tell them to sod off. What Labour did was in my mind nothing short of criminal.

How can we be cutting services left, right & centre here yet be told to cough up ?3 billion for another EU member who decided not to make cuts.

I mean at least Ireland had tried to make the changes. They've made some really tough changes and that's when friends help each other out.

But Portugal has flaked out. We shouldn't therefore bail them out until they've tasted their own medicine.

agree niceguy. well said.

and this is at a time when english students will be asked to cough up 9k a year for tuition fees and leave uni with masses of debt - no-one will help them out.

The problem is the form that the EU has taken. We should have just left it as a common market. They kept putting more and more measures in place. Now it is just one huge unwieldy bureaucracy and a money pit.

Brit taxpayers spent £850 billion bailing out the banks. Those still handing out obscene bonuses and tax avoiding (evading) instead of making good on the debts they have.

If the UK gov is forced to help Portugal will be much less than the £3.5 billion odd given to Ireland. Those of you Little Englanders who are fed their daily propaganda by DM, Torygraph, Times and just about most of the media probably don't know that the government in Portugal wanted to bring in yet more savage austerity measures but the conservative opposition voted against these latest measures opportunistically in order to bring down the centre left government. To punish the Portuguese people by petty politicking was their aim and refusing to help Portugal now would be doing much the same.

If Portugal follows Greece and Ireland in accepting 'bailout' packages, it's only to facilitate the continued paying off of the bad debts of European bankers and speculators out of workers' taxes.

Hi Glasnost. Firstly I'd dispute the £850 billion figure but that's not relevant to this subject. Neither are bonuses.

Yes, the few billion would be insignificant compared to the banking bailout but that was a UK problem which the UK government dealt with (or dealing with).

The Portugese government (or more accurately people if we include the opposition) have voted against austerity when they knew the alternative was bailouts.

So instead of bailing them out, I think it would be better for them to at least make the effort before coming to the rest of us for a handout.

And correct me if I am wrong but Portugal isn't screwed because they had to inject large amounts to prop up a screwed up banking sector like Iceland & in part Ireland. It's because they've gotten used to spending & borrowing to fund it.

Osborne talking to the Chamber of Commerce about the Portugal bailout here.

they should HAVE To impose the austerity measures thatwe are putting up with - why should we pay for them to stick their heads in the sand

It wouldn't matter if 10 million people marched against this the govt wouldn't bloody listen anyway.

Q&A on the reasons behind Portugal's crisis for those who are confused or struggling to shoehorn the situation into their existing world view here.

IMO the Euro was a vanity poject between France and Germany so they should pay for the whole bloody mess between the pair of them.

about budget cuts they have made budget cuts salaries have been cut really cut not just through taxation but on payslips and in many other ways the cuts have been felt
interestingly the current (care taker now) government is Socialist and they have been advocating for cuts, the opposition, a now strange alliance of right and extreme left have voted against it

it will be interesting (for me) to watch how it plays out

Austerity measures (ie. savage cuts) had already been carried out in Portugal leading to quite phenomenal mass demos and a successful general strike. The bailout was inevitable as the country was effectively bankrupt anyway and should've been carried out earlier instead of using the dire economic situ as an excuse to roll back welfare, cut vital services etc.

The banking tsunami has been a handy tool to loot taxpayers pockets, roll back and damage public services with a view to eliminating them sooner ot later in order to pay for the bailouts and then go cap in hand to EU/IMF anyway. It's quite diabolical and will be the ruin of all of us including the plutocrats initiating all this. IF we don't rise up and stop it of course instead of indulging in petty Europhobic xenophobia.

Or of course the real problem is that Portugal spent more money than it had by borrowing it and now it's finding that it can't borrow more and living within its means is an unattractive option.

The banks did not force Portugal to borrow money. As per the BBC link above, they did it to fuel "investments" and as a result of high public spending.

Why is it automatically the banks fault?

We should NOT be bailing out Portugal. This country should never have joined the euro, other 'siesta' countries will shortly follow. Some countries will return to their own currency, when they see what a balls up it has been to have interest/tax rates set by the EU.

Our 'European brothers and sisters?' Newwave, I think you've had too many holdiays in Tenerife!

Glasnost you don't even live in this lovely country but pray tell me how much is Italy bailing out Portugal for? This country is broke, skint, we can't afford to keep bailing these countries out, and we shouldn't have to ffs we are not even in the Eurozone!
Glasnost you really take the pee! LOL! Europhobic xenophobia? What does that mean! If not wanting to bail out countries for billions when the elderly sit in their own pee waiting for a hospital bed, or our libraries close, then I'm afraid there's millions who think like me.
Not only do we bail out European countries to the tune of billions, we also give billions in foreign aid. Pakistan will now get 650 million over a four year period, not forgetting India with its space programme getting 60 million. This nonsense has to stop, but Cameron et al will get his just desserts at the ballot box! P.S. Might think of bailing out a small part of Tenerife as I'm on holiday there shortly. I love MN.

Will only bail out Tenerife when official recognition states they are bankrupt!

what does 'siesta' countries mean?

Basically in my eyes it's like this.

Portugal's in massive debt. They've spending commitments way above what they raise in taxes. How and why they got here is rather by the by. The fact is that they are in the shit.

To me they haven't had their "lightbulb" moment yet. The realisation that they are in debt and they need to take tough, unpopular measures to sort it. That it's going to be painful and a large section of their population (usually the poor) will suffer BUT they have no other choice. It's pain now...or even MORE pain later.

But when they came to vote, their politician's bottled it and decided it was too much. So now they've come cap in hand to the EU fund who we contribute to (thanks Darling).

What they are saying is that if we don't bail them out then it's the whole Euro at stake and even more countries will suffer as lenders will jack all our rates up.

But the other side of the coin is we're letting Portugal effectively hold a gun to our heads. They're effectively saying "Give us more money because we want to keep spending or you'll ALL be in trouble."

Faced with what I can only consider as blackmail, I have to say we should call their bluff and say "No. Sort your own shit out first"

To me it's no different than an errant teenager demanding money off his mum.

I suspect if the EU says no, Portugal would soon change their tune as they stare into the abyss.

Alas I fear it would never happen as our EU politicians have no bottle and don't want to admit that the Euro is/was a terrible mistake.

As I understand it 'bailing out' means buying some Portuguese bonds - basically loaning them some money. Also as I understand it the interest rates on these bonds, although not as ridiculous as the 'market' ones will be considerably higher than the UK is paying on its debt.

So we will be lending money we don't have, but at a higher interest rate than we are borrowing money at. Which means we will make a profit, doesn't it?

So what is the problem?

Risk of default - if you look at Iceland which really wanted to default, even they haven't.

The real issue here is not that the Portuguese have done anything wrong, it is bond traders getting together in a cartel and driving up prices for their own profit. Big finance holding countries to ransom. That is what is crap - really what should happen is that big international regulation of bond markets to stop this stuff - and a Tobin tax.

^"edam: It's a wake up call that the greedy, incompetent bastards in finance still expect taxpayers to pick up their bills. The institutions that lent money to Portugal, Greece, Spain and Italy made a bad decision. They should bear the consequences of that decision rather than expect every taxpayer in the EU to pick up the tab. If there are potentially serious negative consequences for the public, maybe we should look at risk-sharing - not dumping the entire risk on the taxpayer.
It's heads financiers win, tails the rest of us lose all over again.
And the austerity measures the financiers demand are so savage they will make the problem worse, not better. Ordinary people thrown out of work and plunged into misery while the fat cats get even fatter."^

Yes - In denmark they have told the bankers to get stuffed, and no more bonuses until they have paid their debts to society.

"it is bond traders getting together in a cartel and driving up prices for their own profit. Big finance holding countries to ransom"

We need regulation of bond markets - elsewhere it means people are starving due to speculation on FOOD, and driving the prices out of the reach of the average consumer.

HHL, interesting about Denmark, do you have any links so I can find out more?