Portugal's acceptance of a financial bailout from the European Union (EU) is nearing finalization as the Iberian nation's officials are hard at work negotiating the final terms with the EU and the International Monetary Fund (IMF).
Freddy van den Spiegel, chief economist and director of public affairs for BNP Paribas Fortis, told NACM Portugal’s action was a necessary step but far from a Panacea for deep problems in the Iberian nation or the rest of the EU.
“The bailout is not really a surprise; it demonstrates the political agreement to rescue the Euro,” said van den Spiegel, at speaker at this weekend’s FCIB I.C.E. Conference in Chicago. “In the short run, this is positive as it restores some confidence in the EU. However, the existing problems are not resolved, and this remains a challenging problem for the future.”
It will mark the third of the so-called “PIIGS” nations (Portugal, Italy, Ireland, Greece, Spain) to accept a bailout in less than one year amid crushing debt loads. It has been speculated that such a bailout could reach upwards of $120 billion (USD) and almost certainly will come with forced austerity measures.
(Note: Registration for the 2011 I.C.E. Conference will remain open through the weekend and onsite at Chicago’s lush/historic Drake Hotel. For more information or to register, visit http://www.fcibglobal.com/ICE2011).
Brian Shappell, staff writer