Portugal Looks Inward for Redemption
Coupons will be acceptedDec 1st, 2010 | By Paul Moth | Category: Business
Portugal has delayed today's planned auction of Government Bonds to implement a new stopgap measure to fend off national bankruptcy.
A source wishing to remain anonymous said today in Strasbourg, the putative capital of the European Union, that José Manuel Barroso, President of the European Commission, has sanctioned “a financial deal between Portugal and itself” to support that country's stumbling economy.
Portugal will lend itself €140 billion. “This will keep the hounds of the IMF [International Monetary Fund] at bay in the short term,” claims the source, “and will allow Portugal the necessary time to rig
ht its ship or skip town.”
In the wake of similar financial turmoil in Greece, France and Ireland, Portugal sought a new direction. The EU had campaigned for assistance from other member nations – Malta committed some cigarettes and Cyprus donated a hundredweight of fresh apricots – but Lisbon decided to rely on itself.
“This is something new,” says João Pinguine de Azeitao, assistant Portuguese finance minister. “Our banks lend our banks money. The profit stays in Portugal. We will see an upside quickly.”
“This is essentially a cheque kiting scheme on an enormous scale,” observed Wall Street analyst Jerome Wilcox. “Portugal will write itself cheques to pay for the cheques it is writing. This is something the United States has to seriously consider as an option. It's like Quantitative Easing without having to print all that currency.”
Several economists confessed to having no idea how the economy worked and thought the Portuguese gambit was as good a shot as any.