Euro Under Siege As Portugal Hits Panic Button! Ireland Told: Take EU Bailout or Trigger Crisis!
- Trouble is surfacing in Euroland. Looks like the snakes are taking turns bashing the industrialized world. It was America, now it is Eurozone’s turn. I have no doubts that the Eurozone will QE to infinity as a result of this sovereign debt crisis! All major fiat currencies are heading towards meltdown!
Euro under siege as now Portugal hits panic button
The euro is facing an unprecedented crisis after another country indicated on Monday night that it was at a “high risk” of requiring an international bail-out. Portugal became the latest European nation to admit it was on the brink of seeking help from Brussels after Ireland confirmed it had begun preliminary talks over its debt problems.
Greece also disclosed that its economic problems are even worse than previously thought. Angela Merkel, the German Chancellor, raised the spectre of the euro collapsing as she warned: “If the euro fails, then Europe fails.” European finance ministers will meet in Brussels on Tuesday to begin discussions over a new European stability plan that is expected to result in billions of pounds being offered to Ireland, Portugal and possibly even Spain.
The veteran Conservative MP Peter Tapsell warned that the “potential knock-on effect” of the Irish crisis “could pose as great a threat to the world economy as did Lehman Brothers, AIG and Goldman Sachs in September 2008″. Ireland has resisted growing international pressure to accept EU financial assistance amid concerns that this would lead to a surrender of political and economic sovereignty.
However, the German government is expected to signal that Ireland may have to accept a pounds 77?billion bail-out, along with a loss of economic and political independence, as the price of preserving the euro. Mrs Merkel said that the single currency was “the glue that holds Europe together”. Her words came as fellow eurozone members Portugal and Spain rounded on Ireland. They fear that international concerns over the euro will lead to so-called market contagion spreading to them.
Fernando Teixeira dos Santos, the Portuguese finance minister, said: “There is a risk of contagion. The risk is high because we are not facing only a national problem. It is the problems of Greece, Portugal and Ireland. This has to do with the eurozone and the stability of the eurozone, and that is why contagion in this framework is more likely.” Mr Teixeira dos Santos added: “I would not want to lecture the Irish government on that. I want to believe they will decide to do what is most appropriate together for Ireland and the euro. I want to believe they have the vision to take the right decision.” He later sought to clarify his comments, insisting that Portugal was not preparing to seek assistance.
Greece had earlier added to the growing uncertainty when it said it would breach the conditions for the bail-out it was granted by the EU earlier in the year. The Greek government said its debt problem was far worse than previous dire forecasts.
Ireland told: Take EU bailout or trigger crisis
Dublin warned it has 24 hours to make decision as EU emergency talks loom amid fears Irish banks’ contagion may spread to other eurozone countries
An increasingly isolated Irish government was coming under mounting pressure tonight to seek an EU or International Monetary Fund bailout within 24 hours amid fears that contagion from its crippled banking sector might spread through the weaker eurozone countries.
Portugal, Spain, the European central bank and opposition parties urged Brian Cowen’s coalition government to remove the threat of a second crisis in six months by putting a firewall between Ireland and its 15 partners in the single currency.
With finance ministers from the eurozone due to hold emergency talks tomorrow night, financial markets were expecting Dublin to finalise negotiations with the EU over the terms of a deal to allow Ireland to rescue banks laid low by the collapse of the country’s construction boom.
“The Irish problem is spreading, but it could get more volatile,” said Ashok Shah, chief investment officer at London Capital, a fund management firm. “They have to get this bailout, they have a period of time before it gets impossible, before nasty things happen. The longer they leave it, the more difficult it will get.”
Portugal has seen its borrowing costs rocket along with Ireland’s as speculation has grown that it too may have to consider a bailout. Its finance minister, Fernando Teixeira dos Santos, told the Wall Street Journal his country had been hit by a contagion effect caused by fears about Ireland’s ability to pay its debts.
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