LONDON (MNI) – Current yields on Portugal and other EMU periphery
government debt are not justified by the fundamentals of their public
finance positions, a Fitch Ratings analyst said Tuesday.
Speaking in a teleconference on its latest European government
borrowing report, the analyst said:
“We don’t feel that yields faced by Portugal and other peripheral
euro zone countries are justified by the underlying fundamentals of the
public finances”.
“In the medium term there is no reason why Portugal should have to
continue to borrow at 7% from the markets given that it had a very
clearly defined fiscal consolidation programme and quite an ambitious
structural reform agenda”.
The analyst noted the fall off in international investor interest
in holding Portuguese debt due to market volatility but said that this
year and in future years euro zone government net borrowing would fall.
Current Portuguese bond yields are around 6.8%.
–London Bureau; Tel: +442078627492; email: ukeditorial@marketnews.com
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