Dec. 17 (Bloomberg) -- Portugal will probably be the next country in Europe to receive aid as it struggles to finance its debt in 2011, said Alastair Newton, senior political analyst at Nomura International Plc.
“The country is going to be bailed out early next year, by March at the latest,” he said in an interview in Milan today. Portugal will follow Ireland in tapping the European Financial Stability Facility, London-based Newton predicted, referring to the rescue fund known as the EFSF.
Irish lawmakers on Dec. 15 voted to accept an 85 billion-euro aid package from the EFSF and the International Monetary Fund to stabilize the country’s finances amid contagion from Greece’s debt crisis. Greece was first in Europe to be bailed out in May, getting 110 billion euros in emergency loans from the European Union and the IMF.
Portugal will likely need aid in the first half of next year when it must pay down or roll over 20 billion euros in debt amid weak economic growth, Newton said. “It’s not clear that it can do that without support,” he said, adding that neighboring Spain probably won’t need a bailout.
While sovereign risk will remain in the spotlight in the first quarter of 2011, financial markets “are not particularly concerned about the euro per se, and the risk of some sort of breakup of the euro zone remains very low,” Newton said.
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