Portugal's borrowing costs jump as political tensions rise

Anti-austerity protesters outside the Portuguese parliament in Lisbon Portugal's austerity cuts have sent protesters onto the streets of Lisbon

Related Stories

Portugal's borrowing costs rose to a seven-month high as political tensions grow over the country's bailout terms.

Yields on 10-year bonds hit an intraday high of 7.9% before easing back, while the Lisbon stock market closed down by 1.6%.

On Friday, the opposition Socialists demanded a renegotiation of Portugal's bailout terms.

Investors fear disagreements over the bailout will weaken Portugal's commitment to economic reform.

Socialist leader Antonio Jose Seguro told parliament: "We have to abandon austerity politics. We have to renegotiate the terms of our adjustment programme. The prime minister has to recognise publicly that his austerity policies have failed."

Divisions over the bailout have already forced Lisbon to request a delay in a review of the bailout by its creditors - initially due to start on Monday - until the end of August or early September.

Nicholas Spiro, managing director at London-based Spiro Sovereign Strategy, said in a research note that there were worries that "the reform drive would grind to a screeching halt".

Portugal has received a 78bn-euro bailout, but critics of the government say the terms of the rescue have cause the biggest economic slump since the 1970s and sent unemployment to record levels of around 18%.

More on This Story

Related Stories

From other news sites

* May require registration or subscription

More Business stories

RSS

Features & Analysis

  • French luxury Tea House, Mariage Freres display of tea pots Tea for tu

    France falls back in love with tea - but don't expect a British cuppa


  • Woman in swimming pool Green stuff

    The element that makes a familiar smell when mixed with urine


  • People take part in an egg-cracking contest in the village of Mokrin, 120km (75 miles) north of Belgrade, Serbia on 20 April 2014In pictures

    Images from around the world as Christians mark Easter Sunday


  • Female model's bottom in leopard skin trousers as she walks up the catwalkBum deal

    Why budget buttock ops can be bad for your health


From BBC Capital

Programmes

  • An aerial shot shows the Olympic Stadium, which is closed for repair works on its roof, in Rio de Janeiro March 28, 2014.Extra Time Watch

    Will Rio be ready in time to host the Olympics in 2016? The IOC president gives his verdict

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.