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Original poster

Say NO to bailing out Portugal

148 replies

longfingernails · 06/04/2011 21:13

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!

OP posts:
earthworm · 07/04/2011 21:12

Robert Peston's take on who will be paying for Portugal's mess and why

earthworm · 07/04/2011 21:20

And the IMF's report into Denmark's response to the financial crisis here

edam · 07/04/2011 22:06

thanks for the link, earthworm.

Original poster
longfingernails · 07/04/2011 22:17

Portugal wants a free lunch. It borrowed and borrowed and borrowed, hitched itself to the euro for political reasons, and now her politicians are even refusing to cut public spending!

Why should Britain bail them out? We are not part of the euro. We have no big exposure to Portugal. We are taking responsibility for sorting out our economy, even though it is painful. They want to avoid all difficult decisions.

The easiest decision of all, of course, should be to leave the euro. They can use sovereignty to insist that euro-denominated sovereign debt is forcibly converted into the escudo - let those bondholders who took the risks take the haircut.

I agree with edam to this extent - why mollycoddle bondholders? They rightly take risks - but the point about taking risks is that sometimes they don't work out. If not, you should pay the price. This is fundamental to capitalism.

What we have here is Britain (because of Alistair Darling's final two fingered salute to the country) effectively having to pay the coupons of Portuguese bondholders, simply because Portugal is too spineless to sort itself out.

Enough!

OP posts:
complimentary · 07/04/2011 22:26

LFN. well said and goodnight. Smile

noddyholder · 07/04/2011 22:28

I don't think we should be so quick to judge Apparently despite their protestations spain is next and we are the next country after them on the list with regard to national debt. We need to help them the ramifications could be worse if we don't

Original poster
longfingernails · 07/04/2011 22:38

What do you mean "next"? Our deficit is already bigger than Portugals.

The only reason our interest rates are near those of Germany rather than Ireland/Greece is because of the confidence that George Osborne has ushered in with his deficit reduction plan.

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noddyholder · 07/04/2011 22:42

I was just watching the news and they had a list of economies that were going in the same direction in order of how bad the situation is deemed by teh IMF. It was Greece,Ireland.Portugal,Spain,UK. The man in the knowHmm said that economists are trying not to believe that the same will happen with Spain because we aren't far behind them.

glasnost · 07/04/2011 22:55

noddy you tell them: it's xmaaaaaaaaaaassssssssssss! Sorry, couldn't resist. Am sure have had occasion to reply to you like that on another thread.

Exactly true re. UK's untenable economic position so would do well to be a tad more humble in such matters. No bugger in EU or otherwise is waiting for UK's paltry bailout peanuts. Truth is noone cares about UK. Is a minor player.

FunnysInTheGarden · 07/04/2011 22:57

chillax. Portugal is a lovely place to go on holiday. Help them I say and Save Our Holidays to the Algarve

Original poster
longfingernails · 07/04/2011 23:08

I fully encourage British tourists to go on holiday to Portugal, if they so wish.

What I cannot stomach is our government bailing out theirs just to provide a figleaf around the euro's ever more apparent idiocy.

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huddspur · 07/04/2011 23:13

Portugal can't be allowed to default because if it is allowed to then investors may lose all confidence in the euro causing it to devalue massively

FunnysInTheGarden · 07/04/2011 23:14

Madeira is lovely too............lots of mountains.

glasnost · 07/04/2011 23:18

Whereas bailing out banks in the UK to the tune of £850 billion at taxpayers' expense is cool wichooo is it lfn? Quite bizarre.

When the UK goes bust who's going to bail us out? China?

Original poster
longfingernails · 07/04/2011 23:23

Of course not. Bailing out the banks was a catastrophic blunder. We should have let the banks who took bad risks go bankrupt. That is part and parcel of capitalism.

In capitalism you reward success, but you also punish failure.

Instead, Labour's bank bailout merely rewarded failure.

OP posts:
edam · 07/04/2011 23:33

huddspur - these would be 'investors' who expect taxpayers to bail them out when they make the wrong call, then. Strange definition of investment. More like a one-way bet with the taxpayer picking up the bill if it goes wrong.

LFN - forgive me, but I don't recall Gideon or Dave or any of that lot arguing that the Labour government should let the banks collapse. They were all in favour of bailing out their chums in the City.

huddspur · 07/04/2011 23:37

edam- I'm talking about speculators on the currency markets

Original poster
longfingernails · 07/04/2011 23:38

Yes - they were wrong to do so.

Cameron and Osborne got the judgment wrong when they foolishly agreed with Labour's disastrous spending plans after 2005 for purely political reasons, and they got the judgment wrong when they supported the bank bailout. They probably would have done the latter in office too, sadly - but almost certainly not the former. Osborne is a natural Thatcherite, even if Cameron is not - and would never have allowed himself to be shackled to massive structural deficits.

Thankfully, they have got the economic judgment broadly right in my opinion now. Personally, I would have preferred deeper spending cuts (including bigger benefit cuts) which would also help tackle inflation - and of course, no EU bailouts.

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BaggedandTagged · 08/04/2011 07:06

Whereas bailing out banks in the UK to the tune of £850 billion at taxpayers' expense is cool wichooo is it lfn? Quite bizarre.

It's balance sheet vs P&L though. If we bail out Portugal, it's just expense (as I understand it- correct me if I'm wrong), whereas mid term, the government stands to make a profit out of the banks bailout (Gov is majority shareholder in RBS and HBOS).

I'm no fan of Brown but I'm not sure he really had a choice re banks bail out, unless the collapse of the monetary system appeals (i.e. money ceases to have any value).

Niceguy2 · 08/04/2011 08:29

They are saying that the Portugal bailout is going to cost around ?100 billion. Unfortunately no-one in Europe has a spare ?100 billion so we're going to have to erm....borrow it.

And why? To pay a country who refuses to acknowledge the steps they MUST take in order to live within their means. Sorry but I'd have to say no to that.

If Spain is next then we're all fucked doomed. The banking bailout can't be compared to this situation because there, we were saving our own economy and taking the steps we felt necessary. Here we're being asked to save a friendly economy except they won't accept they're in the shit. Like one of those kids from "Bank of Mum & Dad" who has spent up to their eyeballs and now expecting their mum to give them more money so they can carry on.

I must admit I lol'ed when I read on the BBC News site that the European Commission would discuss a deal with the Portugese but they're not sure if the new govt can agree to the austerity measures which will be attached as conditions. In short, they're still taking the pi$$ and no lightbulb yet.

claig · 08/04/2011 09:29

No one is going to hand over 100 billion because someone is taking the piss, not even the ever generous Germans who always stump up the majority of all of these bailouts.

The reason Portugal will be bailed out is because the banks are exposed to risk. Yet again the people, mainly the long suffering ever paying German people, will have to bail out the bankers. Otherwise contagion will spread and banks will again be at risk, and other countries will begin to teeter. Possibly Spain next and then who? Possibly us.

How long will the German people stand by while their politicians bail out all of Europe?

claig · 08/04/2011 09:32

How long will the German people stand by while their politicians bail out all of the bankers?

GiddyPickle · 08/04/2011 09:36

This reply has been deleted

Message withdrawn at poster's request.

claig · 08/04/2011 09:36

No one bailed Germany out during the Weimar years when hyperinflation hit heights that the world had never seen. No one cared about the plight of teh German people. No one spends 100 billion because they care about people. They spend 100 billion to save bankers. Who takes precedence, people or bankers?

glasnost · 08/04/2011 09:43

"In capitalism you reward success, but you also punish failure."

Failure caused by the avaricious illogical capitalist system itself. Hmmm. You can't have your cake and eat it longclaws.

If all the banks had been nationalised in the first place they wouldn't have gone bankrupt. Don't you see that it's your clapped out, corrosive, toxic capitalism that's caused this mess and is causing one failed state after another? Time for a change.

You can't stand by and leave the Portuguese people to suffer due to bastard bankers. So bail 'em out and then nationalise them. ALL of them.

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