PORTUGAL / EUROZONE: Socrates Agrees To $116 Bn Usd Bail-out With New Austerity Measures.

GUARDIAN/

   Caretaker PM Jose Socrates ( pictured L) is calling a 3-year $116 bn usd/78 bn euro bail-out a "good agreement that defends Portugal".
   More details remain to be negotiated...including the all important interest rate.
   Portugal's deficit must be cut to 5.9% of GDP this year, 4.5% in 2012 and 3% in 2013...somewhat laxer targets than before.
   SOME of the austerity measures required include: a freeze on public sector wages and limits to job promotions, increases in the sales tax on cars and tobacco, privatization of national energy companies and sale of TAP Air Portugal, and the reducing generous state pensions and the freezing others.
   The measures must still be voted on by its congress.

TO SEE: Euronews 1:28 English language Report:
http://www.youtube.com/watch?v=4qKfY7Jm7mI&feature=player_embedded#at=71

PORTUGAL/SPAIN/ EUROZONE: Socrates Out After "Austerity"Third Strike Rejected By MPs; Fitch Lowers Rating; Moody's Downgrades Spanish Banks.

  

NYTIMES/


  A day after his parliament rejected the third round of budget cuts, PM Jose Socrates (pictured) has quit.
  Now, Portugal may need as much as 70-80 billion euros... even as it continues to rule out a rescue.
  Fitch added to the fiscal mess by lowering the nation's long-term foreign and local currency issuer default ratings to ‘A-’ from ‘A+’... and in its short-term issuer default ratings to ‘F2’ from ‘F1’.
  Portugal soon faces its first bond maturities of 2011 with redemptions worth about 9 billion euros on April 15 and June 15.
  Spain is now also under market pressure from speculators after Moody's today downgraded most of its banking sector.

PORTUGAL / EUROZONE : 11 Jan. UPDATE: Bond Yields Rise; Japan Plans Purchase; Weds. Auction To Be Scrutinized.

LINK CHANGE/ NYTIMES/

     Japan has announced a show of support  for the eurozone. Its finance minister said it will buy about a fifth of the bonds that the European Financial Stability Facility will sell later this month to finance the bailout fund.
   The yield on Portugal's 10-year bond dipped slightly after hitting a new high yield of 7.16% for the fourth day, which fed more speculation it will need a bail-out like Greece and the Irish Republic.
     Lisbon, of course, disagrees.
     Wednesday, in a closely watched auction, Portugal will attempt to raise 1.25bn euros in government debt.
     Over the weekend, France and Germany reportedly pressured Portugal to use European rescue funds to stop the slow financial drip and help isolate the crisis from spreading to Spain.
      But several officials denied  those reports.
     Analyst Michael Leister said such conflicting statements were “bringing back memories of Ireland.”

 ALSO, SEE REUTERS' PAUL TAYLOR ANALYSIS/OPINION :
 On "The Battle Of Spain" as "...Germany is blocking any financial lifeline for a country until it is actually drowning. Astonishingly, China, which pledged last week to buy Spanish government bonds, is doing more to help Madrid than Berlin is."
http://www.nytimes.com/2011/01/11/business/global/11inside.html?_r=1&src=busln

EUROZONE: 2ND UPDATE: Spain And Portugal Pile-on Reluctant Ireland To Take Bailout ...And Avoid Dreaded Contagion.

LINK CHANGE/MORE DETAILS/ NYTIMES/ 16 NOV:
   As their borrowing costs skyrocket, Portugal along with Spain are heavily lobbying Ireland to take an EU bailout.
They fear "contagion" from the retreat of investor confidence.
      The Irish government admitted that it had been in talks with EU officials over its debts but reports are that it is very reluctant to accept help at this time.
    Portugal's Finance Minister Fernando Teixeira dos Santos (pictured) said: “If things are getting worse in Ireland, for instance, that will have a contagion impact on the other euro zone economies and particularly on those that are under closer scrutiny of markets, like Portugal,” he said. Asked if Ireland should accept a bailout to stem the contagion, Teixeira dos Santos said, “It’s not up to me to make that assessment.”
    Portugal especially worries investors because it has lagged Spain and even Greece in  proposing new "austerity" measures.
    Many economists believe it inevitable that Ireland will tap into and may need ALL of a €60bn EU rescue fund set up in May... just to shore up its ailing banks.

UPDATE and ANALYSIS/  NYTIMES/    17 NOV:
  Are Irish pride and national politics holding-up an agreement? An political observer said that Ireland's PM Cowen was correct “in playing coy and cautious until absolutely certain what the situation is and what’s on the table, to get the strongest deal he can.” But “pride cometh before a fall. We’re in serious danger of falling off a cliff.” Plus, Germany wants Ireland's corporate tax raised. Experts estimate Irish banks may need $100 billion euros bailout. Austria is even holding up its contribution to the Greek bailout fund because “If Greece doesn’t fulfill certain things, we have the need for discussion,” its finance minister said. Greece was “not 100 percent on track."

BRASIL/PORTUGAL: Friday's Match May Be Great Soccer.

CANADIAN PRESS/     Powerhouse Brasil and surprising Portugal meet again Friday morning. Brasil wants to secure first place in its group and Portugal needs at least the draw that will guarantee its place in the second round. "I think Portugal and Brasil have what it takes to put on a great football show for the world," said Portugal's coach Carlos Queiroz. "Let's see whether we and Brasil can make fans focus on football and less on the Jabulani (ball) and the vuvuzelas." For Portugal it will be the biggest challenge after easily thrashing North Korea 7-0 in its last match, following a 0-0 draw against Ivory Coast in its opener.

BRASIL/PORTUGAL: Kaka Angry About Missing Portugal Soccer Match-up.

TELEGRAPH.U.K./ Brasil soccer star Kaka is angry about his dismissal from the upcoming Portugal match for a light push on Ivory Coaster Abdelkader Keita, who he says over-reacted. "I should have controlled myself a bit more," Kaka said, blasting Keita for "simulation." "These things should be avoided - you should avoid taking risks at a World Cup." Kaka spoke of the strong natural rivalry with Portugal: "Yes... after all there are three Brasilians in their team (Deco, Pepe and Liedson)."
Portugal is unbeaten in 17 matches following their 7-0 thrashing of North Korea and coach Carlos Queiroz hopes to avenge a 6-2 friendly defeat to Brasil in 2008. "We don't want the Brasilians to score against us this time – it is a question of honor," said Queiroz. To date, the Brasilians have won 12 and the Portuguese four of 18 matches with two drawn.

THE EU: Euro's First Big Test Underway.

NYTIMES/ANALYSIS/  The 16 countries that use the euro are facing a new reality: their 10-year-old common currency is being challenged by the diverse economic and financial conditions of its members. “... It is clear this year that global macro risk will come from Euroland and not the U.S.,” says a financier.

HONDURAS: Portugal Now Mediating Election Issue At Ibero Summit.

MERCOPRESS/
Portugal is trying to mediate among Ibero-American countries and gain a consensus on the Honduras election. Meanwhile Spanish Minister Miguel Angel Moratinos declared that "Spain neither recognizes nor ignores the elections occurred in Honduras".

Socialism's Slow Death In Europe.

NYTIMES/
"Even in the midst of one of the greatest challenges to capitalism in 75 years, involving a breakdown of the financial system due to “irrational exuberance,” greed and the weakness of regulatory systems, European Socialist parties and their left-wing cousins have not found a compelling response, let alone taken advantage of the right’s failures.
German voters clobbered the Social Democratic Party on Sunday, giving it only 23 percent of the vote, its worst performance since World War II.
Voters also punished left-leaning candidates in the summer’s European Parliament elections and trounced French Socialists in 2007. Where the left holds power, as in Spain and Britain, it is under attack. Where it is out, as in France, Italy and now Germany, it is divided and listless."

Socialists Retain Power In Portugal.

GUARDIAN.UK/
"The centre-left Socialist party hung on to power in Portuguese elections last night, despite 9% unemployment, the country's highest for 20 years. With more than 99% of votes counted, the Socialists had 36.5%, against 29% for the centre-right Social Democrats, the main opposition. The prime minister, José Sócrates, the Socialist leader who promised big public works to stimulate growth, said: "This is a clear and extraordinary victory." The conservative Popular Party polled 10.5%, the more radical socialist Left Bloc almost 10%, and the Communist/Green coalition almost 8%. Turnout was 60.5%."

Portugal Plugs Into Electric Cars.

From GlobalPost.com

Portugal will build 1,300 charging stations in an attempt to liberate itself from foreign oil dependence.

The small nation already produces one-third of its energy from renewable sources.