Debt crisis: Portuguese banks threatened by Greece
27 May 2011
Jornal de Negócios
"Portuguese banks are the most exposed to the Greek crisis", headlines Jornal de Negócios. According to the Bank for International Settlements, the Portuguese financial system is exposed by more than seven billion euros to the Greek economy, or 4.2% of GDP, an international record. The Lisbon business daily also notes the warning given by Brussels on May 26 that aid for Greece and Portugal could be suspended if quarterly targets for fiscal consolidation are not reached. Eurogroup president Jean-Claude Juncker stressed that the IMF could immediately freeze the next payment to Greece in case the country doesn’t accomplish the goals established by the troika. The same applies to Portugal, an official source from the European Commission confirmed to the newspaper: the funds release is subject to a quarterly analysis of objectiives [established for the Portuguese economy] that will be announced next week by the IMF mission, by the time they will return to Portugal. Jornal de Negócios warns that for Portugal and Greece, if the deviations are large and there are no additional measures deployed to overcome any bad results, the funding will even be "frozen".