Reflections on current affairs in Portugal by journalist and author Len Port.
Monday, June 20, 2011
Big week: Monday in Luxembourg
Eurozone finance ministers meeting in Luxembourg have failed to agree on releasing a loan payout to spare Greece from default. There is talk of Portugal being dragged further into the mire because of Greece's problems.
Greece is awaiting €12 billion earmarked for July as part of the country's €110 billion bailout negotiated last year. But Europe's finance ministers are insisting that the Greek government first introduce laws to cut the country's deficit and sell state assets.
This demand comes amid mounting domestic opposition, including a three-day parliamentary debate over a no-confidence vote that could bring down the government of Prime Minister George Papandreou.
Said Luxembourg's Prime Minister Jean-Claude Juncker who is chairing the eurozone meeting: “We forcefully reminded the Greek government that by the end of this month they have to see to it that we are all convinced that all the commitments they made are fulfilled.”
The Greek crisis is expected to dominate the EU summit in Brussels on Thursday and Friday this week. Fear of further contagion remains high. Germany is increasingly seen as the vital bulwark against an uncontrolled spiral of default in Europe.
There is growing speculation in financial circles that the 17-nation eurozone will not be able to survive in its present form. There are suggestions that Greece could be forced to leave as early as 2013. Portugal and Ireland may follow. Of course, at this stage it is only speculation.