ML-Implode News - Portugal: Rescuing Europe's Worst Government Bonds May Take More Than ECB

While government debt in the euro region posted the biggest quarterly returns since the European Central Bank started its quantitative easing program a year ago, holders of Portuguese securities were left nursing a loss. Political wrangling to form a government and then a shift in budget policy have been dragging down the market more than in Spain, which is still without an elected government, or even Greece, a byword for crisis.
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"The situation in Portuguese bonds has been compromised by the election result and the instability that came after," said Gianluca Ziglio, a strategist at Sunrise Brokers LLP in London. "That creates uncertainty with potential impact on the rating."
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The issue is that Portugal's prospects just look gloomier compared with neighboring Spain, even without their respective political battles. Portugal's economy is forecast to grow 1.5 percent this year compared with 2.7 percent in Spain and 4.7 percent in Ireland.

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Portugal: Rescuing Europe's Worst Government Bonds May Take More Than ECB