The hottest political storm in Portugal and Egypt

2022-09-19
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The political storm in Portugal and Egypt has stirred the global financial markets. The political turmoil in Portugal, a heavily indebted European country, has tightened the string of the European debt crisis again

the European debt crisis is in the ascendant, and the international oil price has broken 100.

the political turmoil in Portugal, a heavily indebted European country, has tightened the string of the European debt crisis again

for money, for debt, for power, plummeted violently, riots

Brazil's local currency devalued, and the stock market plummeted. On July 2, the BOVESPA index of Sao Paulo stock market fell 4.24%, the largest one-day decline in nearly two years. At the same time, the exchange rate of the US dollar against the local currency real rose to a four-year high; Portugal's turmoil fuels European debt crisis. On July 2, following the resignation of the finance minister (left), foreign minister Portas (right, with Portuguese Prime Minister Coelho in the middle) also announced his resignation to show his dissatisfaction with the severe fiscal tightening policy implemented by the government. Portugal's stock market once fell 7%; The chaos in Egypt intensified and forced the president of the palace. On July 2, Egyptian President morsi asked the military to withdraw the 48 hour deadline set for Egyptian factions a day ago. The intensification of the conflict between the two sides led to a sharp rise in oil prices

this week, Portugal's finance minister and foreign minister resigned one after another. It is reported that the severe fiscal tightening implemented by Lisbon in exchange for external assistance is the primary reason for the widening of differences within the government

market participants worry that a new round of political turmoil may shake the ruling foundation of the current government, and even trigger an early election, which may lead to Portugal being unable to continue to receive the necessary international assistance

affected by this, the Portuguese stock market once plummeted 7% in the session on the 3rd, and dragged down the European stock market

in addition, it laid a foundation for Jiaozuo to stabilize its growth and maintain its momentum. Affected by the unstable situation in Egypt and the U.S. inventory data, the international oil price returned to above the $100 mark on the 3rd, hitting a 14 month high. JPMorgan Chase, Goldman Sachs and other big banks all sent signals that commodities may turn

On the 2nd, the Portuguese government led by Coelho lost another general. Portuguese foreign minister Portas submitted his resignation to Coelho on the same day and announced his resignation

this is also the second senior official to resign from the Portuguese cabinet since this week, and their resignations are still directly related

cabinet ministers staged a series of resignations

local media reported that the reason why botas announced his resignation was dissatisfaction with the appointment of Maria Albuquerque, the Secretary of state for finance, after the resignation of finance minister Gaspar on the 1st

like Gaspar, Albuquerque advocates strict control of the fiscal budget, so the outside world believes that there will be no major change in Portugal's fiscal policy after Albuquerque takes over

in this regard, botas issued a statement saying: everyone knows that I have political differences with Gaspar, the former finance minister, and the Prime Minister decided to continue the policy direction of the Ministry of finance, which I oppose

Portuguese finance minister gastar announced his resignation on Monday, just a day before Portas' resignation. Gaspar is a technocratic official. During his tenure, he introduced a series of fiscal consolidation measures, including a substantial tax increase, in exchange for a total of 78 billion euros in external assistance

it is generally believed that the direct reason for forcing Gaspar away is that he is unable to bear the pressure from within the ruling coalition and Society for fiscal austerity. It is reported that Gaspar submitted his resignation request as early as last October. In his resignation statement, he also said that the reason for his resignation was the declining public support for the fiscal tightening policy and the repeated delays in achieving Portugal's economic recovery goals, which had greatly reduced his credibility as finance minister

Portugal's stock market plummeted, and the yield of national debt broke 7

two important members of the cabinet left one after another, plunging Portugal into the most serious political crisis since receiving international assistance two years ago

analysts said that as the general secretary of the people's party, one of the coalition ruling parties, the resignation of botas has a far-reaching impact, and may even cause the current government led by Coelho to lose the majority of seats in Parliament and face the risk of collapse. At present, botas has not said whether he will withdraw his support for the center right coalition government after his resignation

some analysts believe that the political party led by Portas may continue to support the current government in Parliament when it no longer serves as foreign minister, but this probability is very small. If Coelho loses a majority in parliament, Portugal is likely to hold an early election. Strengthen communication

in the face of such an unfavorable situation that the utilization ratio of polyurethane insulation materials in the construction field will reach 30% - 40%, Coelho said in a televised speech on the 2nd that he would not accept the resignation request of botas, and he would not resign as prime minister, and would try his best to seek common understanding and overcome the crisis

however, the financial markets were not relieved by such cries. After the opening of trading on the 3rd, Portugal's stock market plummeted, and the yield of its national debt soared above the red line of 7%

market participants said that botas' resignation was quite unexpected, and even his ministry of foreign affairs was unaware of it in advance, which caught investors a little unprepared

in mid day trading on the 3rd, Portugal's benchmark psi20 index fell by about 5%, after a 7% decline, the largest decline since October 2008

in the Treasury bond market, Portugal's 10-year Treasury bond continued the decline after the resignation of the finance minister the day before, and correspondingly, the Treasury bond yield rose sharply. According to the data from TradeWe, which carefully polished every detail of the link, the yield of Portugal's 10-year Treasury bond once rose by more than 1 percentage point to 7.525% in the session on the 3rd, returning to the dangerous level of 7% for the first time since November last year

previously, Greece, Portugal and other countries had to seek external assistance after the bond yield exceeded 7%. Portugal's five-year credit default swaps (CDS) also rose sharply by 97 basis points to 501 basis points

the European debt crisis has not left

the situation in Portugal has also dragged down other European markets. On the 3rd, the three major stock markets in Britain, France and Germany fell sharply, down more than 1.6%

the stock market of Greece, Spain, Italy and other heavily indebted countries fell more significantly, and the Spanish stock market fell by nearly 3%. In the bond market, bond yields of other peripheral euro zone countries also rose sharply on the 3rd

Reina, an interest rate strategist at Commerzbank (quotation zone), said that the political instability may affect the progress of Portugal's return to the bond market, and it may be more difficult. In the long run, Portugal may need a package of assistance that includes more support measures

in May 2011, Portugal reached an agreement with the European Union, the IMF and the European Central Bank to obtain a total of 78 billion euros of aid loans from the latter, but at the same time, Portugal must meet the deficit reduction requirements set by the tripartite group

Henry, a European economist at HSBC, pointed out that at present, the lower than expected economic growth and higher than expected fiscal deficits and debt growth in peripheral countries of the euro zone indicate that the overall economic situation of peripheral countries of the euro zone has not really improved

Henry said that compared with the hardest hit areas such as Greece, Portugal is an example on the border. Despite the good development in the past two years, Portugal's cumulative deficit has reached 18billion euros, exceeding the expected 17.6 billion euros; The proportion of debt in GDP also exceeded the original plan of 112%, reaching 123.6%

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