Portugal Doesn't Need Bailout... For Now

Portuguese economic officials continue to reiterate that the European country won't need a bailout, despite what the market thinks. Portugal is set to go back to the bond market on Wednesday, when it hopes to raise $1.6 billion in three and nine year bonds. Portugal will have to raise 20 billion euros this year to fund its operations, and if it isn't able to, chances are it will be forced to seek a bailout, either by the IMF, or most likely, the European Union. Soothing concerns today is the fact that the Japanese government said it would be buying European debt with its currency reserves. Japan is only second to China in terms of reserve currency holdings around the globe. The country's finance minister, Fernando Teixeira dos Santos showed his frustration with the situation, and reiterated that the country is doing its job. “We are doing our job. Clearly, Europe is not doing its job to defend the stability of the euro,” he said on TSF radio. Prime Minister José Sócrates was positive on the moves that Portugal is making in reducing its deficit. The target for deficit as a percent of GDP is 6% this year. “The government is doing its job and is doing it well,” Mr. Sócrates said. “Portugal won't request any financial help for the simple reason that it doesn't need it.” If Portugal winds up not needing a bailout, the Spanish banks could see some reprisal, based off the amount of Portuguese debt the banks have on their balance sheets. Names like Banco Santander, S.A. STD could see a boost, as investors worries subside. Disclosure: no position in names mentioned