Portugal's Situation Is So Dire Its Own Banks Don't Want To Buy Its Debt

Portugal Praying

Portugal’s banks have said no to buying any more government debt, and want the government to take a loan from the IMF or EU, according to Reuters.

Faced with a domestic political crisis that will take the country to the polls on June 5, Portugal may struggle in the interim, prior to the next round of austerity cuts.

The country’s banks want the government to take a short-term loan, from the IMF or EU, which would be separate from any larger bailout.

Just today, Moody’s downgraded Portugal, based on its likely need of a bailout. Yields on the country’s sovereign debt rose, and prices to insure that debt spiked as well.

Don’t miss: Niall Ferguson’s complete guide to sovereign debt crises >

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