Portugal, Ireland, and Spain continue to face economic headwinds as concerns over additional bailouts from the European Union have been propelled by the latest batch of troublesome news in those countries, according to Bloomberg. On Wednesday night, the Prime Minister of Portugal submitted his resignation following the blockage in Parliament of a package of austerity measures that sought to address the countries mounting debt. The move leaves massive uncertainty over the country, which the Royal Bank of Scotland now estimates will need about €80 billion in aid with European officials anonymously projecting a bailout of as much as €70 billion.
The renewed discussion of a possible bailout for Portugal comes as Moody’s Investors Service downgraded its senior debt and deposit ratings for 30 smaller banks in Spain as the government struggles with “balancing the sovereign’s incentive to support the banks with the need to protect its own balance sheet.” The agency lowered 10 banks by two notches, and cut the other five by three or four notches, and kept the outlook negative for most banks. Meanwhile, a separate report from the Central Statistics Office of Ireland showed that gross domestic product in that country fell by 1.6% in the fourth quarter of 2010 from the previous three months, contributing to a 0.7% year-over-year decline in GDP.
Click here to read the story on Portugal from Bloomberg News.
Click here for coverage of the Spanish bank downgrade from Bloomberg News.
Click here to read the story on Irish GDP from Bloomberg News.