Do as Iceland did. Offer the Investors 20 cents on the dollar and if they do not accept it drop it 5 cents per month until they get nothing.

Then.

Quit the EU so as to gain control over ones own finances rather then having such determined in Brussels.

Introduce and new currency for Portugal.

Nationalize the banking system and declare that all Portugese Citizens are free of all debt.

Start fresh with a NON debt based currency ensuring the IMF, The World Bank and International Bankers never gain a foothold in Portugal again.

It would appear as if the third of the most serious tier of debt laden is about to have it's turn before the hammer of international finance. As this money-driven Kabuki play (where the audience knows the plot) goes forward, Spain & Italy are next. What remains to be seen if this spreads to the second tier, Belgium, the Netherlands, Hungary, etc. If that happens, then the Euro and even perhaps the European Union itself is in trouble.

GwNorth, any chance you could take over the US as economic advisor? That is some of the smartest stuff I've read.
The US just keeps giving money to the errant tyrants. Rich begging at the gov't door when they created the problem themselves by charging too much so they all can have their greedy slobber profits while killing innocent people.
My level of disgust at this whole mess is beyond the pale. I tend to write that way.

I'd never make an econominist. But let me see if this is right; All these countries live in this comfortable neighborhood but they want to spiffy up their various domiciles and so they go looking around or the sales rep's come around and each buys this expensive rug. The rug maker being the IMF, the World Bank, etc; and so they buy on credit and turns out to be just like the mortgage thingy here. So they will still pay for the rug, which has been pulled out from under them, and they will have to borrow more to do so And, this I believe, was the plan from the beginning. My mind just cannot wrap it's self around the greed and lust for what? Power? This is world wide too and nothing is sacred except lucre. Tony

So the Portuguese elite will get to loot the working class no matter what, it didn't get to steal from workers through "austerity" measures but will steal from them through a bailout. Revolting.

What you had was a PM who doubled the countries debts in the last 5 years and is about to be the yes man for the EU bankers to make his country's most vulnerable and least able to turn anything around, bend over and take the medicine prescribed by the EU bankers, those who brought us this designer crisis in the first place. In a 30 minute speech last night he blamed everyone but himself and his government for general disapproval of his policies which was shown the 19th in a massive demonstration “Dia de Indignação e Protesto”.

The belt tightening was far too strict and would only delay the need for EU funds anyway. Thank heavens this corrupt self-serving egocentric, euro-yes-man, pretending to be a socialist is out of power.

There are two lines of this article that bear reading:
"José Manuel Barroso quickly warned, though, that the country must stick to the latest reforms announced earlier this month."

Here is the consummate apparatchik of the EU anti democratic dictatorship as represented by the Lisbon Treaty, trying to say that although the parliament has just thrown out the government and its budget for agreeing unacceptable terms with the EU, whoever comes into power elected by the people to deal with these problems in Portugal must continue to follow the EU dictates. Ya, like hell! they're not Greece.

and

"The yields on Portuguese government debt has reached record highs, with the 10-year bond trading hitting 7.6% – widely seen as an unsustainably high cost of borrowing."

This is the kind of thinking these bankers love. Get a country to borrow when its cheap, Tighten the money supply and then say "it's market forces".... While in fact Portugal has to borrow at higher interest only to turn over debt and cover interest, and like it could go "bankrupt" as an EU, Euro member?

While Germany takes satisfaction on its export economy, you have to wonder how Siemens would would have exported an underground railway system to Porto without the debts and finance that the government underwrote. Who is supposed to buy those VW's and Mercedes anyway? That's why the southern European economies where inflated and all those splendid highways were build with borrowed money in the 90s wasn't it?

Either its one Europe or its rich European states playing banking tricks of shrinking money supplies with their less endowed poorer European states.

I suggest the next Government in Portugal go to EU and tell them they are going back to the Escudo and they'll pay their obligations as and when. In short they can and do an Argentina or an Iceland, because they are no where like in the same condition as Ireland and Greece. All this shafting of the populace and extraordinary taxes among the highest in Europe, while Portuguese major corporations like the protected energy company EDP are making record profits at home and abroad due to protected pricing and overseas operations, Meantime the locally economy is left to stagnate and unemployment soars.

It is either Europe and the Euro or it is Portugal and the Escudo, Germany, and France cannot have it both ways, not the good times without the bad at the convenience and profit of the big boys and their banker friends.

Governments should be run for people not banks and corporations and so the next government in Portugal I hope will be a Bloco de Esquedra/PCP coalition that might actually try and protect some workers, and pensioners for a change rather than the friends in big biz that are usually in power.