BRAZIL: President Lula says his country will fully support Portugal so it can overcome its debt crisis

Record ID: 446582

  • Title: BRAZIL: President Lula says his country will fully support Portugal so it can overcome its debt crisis
  • Date: 4th December 2010
  • Summary: MAR DEL PLATA, ARGENTINA (DECEMBER 3, 2010) (REUTERS) SECURITY GUARDING BEACH
  • Embargoed: 19th December 2010 12:00
  • Keywords:
  • Location: Brazil
  • Country: Brazil
  • Topics: International Relations
  • Reuters ID: LVAEV0E8PKS7YKCN7HFCA5QZ4RQR
  • Story Text: Brazilian President Luiz Inacio Lula da Silva said on Friday (December 3) he was willing to help Portugal as much as he could, so that the Iberian country could move out of the eye of the storm in Europe's debt crisis.
    Investors believe Portugal will be the next euro zone country after Greece and Ireland to ask for help as its borrowing costs have risen above sustainable levels while its economy lacks competitiveness and growth is very slow.
    Portugal is likely to need a rescue package of 45-60 billion euros from the European Union and the International Monetary Fund and may not get through the year without seeking a bailout.
    Speaking in Rio de Janeiro to foreign journalists, Lula said both countries would meet to see if they could boost Brazilian investments.
    "Portugal's Economy minister (Jose Vieira da Silva) will come to Brazil to talk with (Brazilian Finance) Minister Guido Mantega to see what we can do to help Portugal more with investments. And we are going to make all the efforts we can to help Portugal, so it can get out of this crisis faster," he told reporters.
    Portuguese Prime Minister Jose Socrates insists Portugal can survive without a rescue and that his austerity budget of tax rises and public sector wage cuts will keep the ship afloat.
    But many economists believe a bailout is just a question of when, not if, and some expect it could happen before the year-end if Lisbon is persuaded to tap EU funds pre-emptively in an effort to stop the euro zone sovereign debt crisis from spreading to Spain.
    Socrates, who is attending the Ibero-American Summit in the Argentine coastal city of Mar Del Plata, said more integrated policies were needed to tackle the crisis.
    "Nowadays, the world needs to rearrange political agendas to face global challenges. And if we could select one global challenge, without doubt it would be the economic and financial crisis. This demands more cooperation between countries and more cooperation too, to change what is necessary to change in the regulation of financial markets," he said.
    Portugal has completed its bond issuance programme for 2010 and its next bond redemption is not due until April, when it has to repay 4.5 billion euros.
    While a Portuguese bailout would be manageable, assistance for its neighbour Spain would sorely test EU resources and raise deeper questions about the integrity of the single currency bloc.
    When asked about the release of classified U.S. cables by website WikiLeaks, Socrates say he considered it an illegal act and refused to make further comments.
    "In the first place I would like to remind you that the disclosure of these documents is an illegal disclosure. These documents don't belong to the public sphere, neither to journalists, nor to anyone but the North American administration. And because of that, if you allow me, I will not make comments about a thing that results from a robbery of an administration of a country that is friends with Portugal, I hope you understand," he said.
    Whistleblower website WikiLeaks has recently released hundreds of confidential diplomatic U.S. cables that have given unvarnished and sometimes embarrassing insights into the foreign policy of the United States and its allies.
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