Portugal Says Its Banks Have Little Exposure to Greek Debt
Portuguese banks have very small holdings of Greek government bonds, reducing the risk to them, Prime Minister Pedro Passos Coelho said.
“With the information that we have available today, there is very little exposure of Portuguese banks to Greek debt,” Passos Coelho told reporters after a European Union summit in Brussels today. “So surely that will not be a big problem in our financial system.”
Germany, France and the Netherlands have started talks with banks and insurers on getting private investors to take part in a Greek rescue. German Chancellor Angela Merkel and French President Nicolas Sarkozy agreed last week to pursue a Vienna Initiative-style solution for Greece, encouraging creditors to roll over expiring bonds until the country’s austerity program shows results or a permanent rescue fund starts in mid-2013.
Passos Coelho leads a government that will have to implement an austerity plan that was a condition of a 78 billion-euro ($111 billion) financial-aid package from the EU and the International Monetary Fund. With the country’s debt and borrowing costs surging, Portugal followed Greece and Ireland in April in seeking a bailout.
Banco Comercial Portugues SA (BCP), Portugal’s second-biggest publicly traded bank by market value, holds about 700 million euros of Greek government debt, Chief Executive Officer Carlos Santos Ferreira said on June 7. “I’m not worried,” he told reporters. He said between 40 million euros and 50 million euros of the bonds mature this year and that Banco Comercial is willing to maintain holdings of Greek debt.
To contact the reporter on this story: Joao Lima in Brussels at jlima1@bloomberg.net
To contact the editor responsible for this story: Tim Quinson at tquinson@bloomberg.net.
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