Portugal is widely regarded as Europe’s second-most troubling nation, with rising debt-to-GDP ratio and unsustainable government spending policies.
In fact, more and more investors are becoming convinced that a debt restructuring in Portugal is simply inevitable.
“When [yields in] the two year bond market are over 20 per cent [as they were two weeks ago], it’s not a bond yield investors expect to get repaid on,” Tommy Molloy of FX Solutions told Business Insider. Anyone who purchases such bonds, he says, “are expecting at least a partial restructuring.”
These charts from Reuters chartist Scott Barber (via @aussietorres) give a deeper insight into why investors don’t think the government will be able to actually repay their debts, at least not in the long term:
Photo: Scott Barber on Twitter
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