Wall Street Journal
April 8, 2011
Is that it? Does Portugal's application for a bailout mark the end of the euro-zone's government debt crisis?
The money's available to tide Portugal over for a couple of years. Greece and Ireland are already bailed out. Investor sentiment in Spain has improved in recent months. So why worry?
On the face of it, the bailout request doesn't change the calculations very much. The country's slow slide away from market finance was widely anticipated even before elections were called after the government failed to push through austerity measures.
The government looks like it has enough cash to meet bond repayments this month, but couldn't find—at a nonprohibitive cost—the €10 billion ($14 billion) it needs in June to meet bond maturities. Portuguese banks, which had been loading up on government debt, this week shouted "Basta!"
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