Vigilantes Home In On Portuguese Beacon As Opposition Claims Government Understated Debt And Deficit Figures By About 25%
With Ireland now a lost cause, the next country which will see its bond yields surge to new records is Portugal. And just so vigilantes don't miss the hint, the Portuguese opposition party has stated that the country's budget deficit and public debt are "higher than those reported by the government." The claim is that Portuguese debt is about 30% higher than claimed by official statistics: instead of 82% of GDP, it is actually 112%. With bankrupt Greece having lied about virtually every aspect of its comatose economy, it is not as easy to dismiss the announcement as merely political bickering, and is sure to leads to at least a modest double digit basis point jump in Portuguese spreads. And once Portugal is rescued, just after New Year's, then it will be time for those last two countries of the peripheral block: Italy and Spain. And after them, it's the core's turn.
Pedro Passos Coelho told a meeting of his Social Democratic Party items like state-run companies' debts were not included in the overall public debt, which the government puts at 82 percent of gross domestic product this year.
He said that the "true" total public debt stood as high as 112 percent of GDP, while the budget deficit should be at 9.5 percent of GDP, far above the minority Socialist government's target of 7.3 percent for the end of the year.
"The state has for many years been removing from the budget a series of activities, which has made a large part of our numbers fictitious," he said in televised remarks.
Government officials were not immediately available for comment. They have previously denied similar allegations by smaller opposition parties, saying that the statistical and budget data were regularly monitored by Brussels.
And just to validate that Europe has become a cesspool of fraud and lies (which is not to say America is any better), Eurostat just announced what everyone has known for along time: that the Greek deficit as a % of GDP was not 13.6% but 15.4%. And that is likely not the last revision.
While lying is now the new normal in Europe, and is therefore not surprising, the only question we have is whether the opposition leak was predicated by greater financial "interests", which now seek to bail out as many countries of the periphery as fast as possible, just so the fate of all of Europe's deficit countries is controlled by the ECB, and not by China, which has recently been stirring about taking over the ECB's role as patsy of last resort.
- advertisements -