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Dagens länkar 4 juli 2013

A deepening political crisis in Portugal and Greece’s inability to push ahead with public sector job cuts sent bond yields rocketing, reigniting concerns about the breakdown of eurozone bailout programmes after months of relative calm in the bloc.

The turbulence reverberated in the rest of the eurozone periphery. 

While Italy’s bond market was relatively calm, Spain’s 10-year bond yield rose 14 basis points to 4.74 per cent, and Greece’s comparable bond yield jumped 34bp to 11.1 per cent.

Investors were also unnerved by another brewing showdown between Greece and its creditors after international lenders warned it that they would withhold an €8.1bn loan payment unless the government redoubled stalled efforts to gut a bloated public sector workforce.

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Rising costs makes it increasingly unlikely that Lisbon could exit its bailout programme as planned;
BreakingViews calls for a rethink of the bailout programme, which might need more money either from the ECB or the private sector;

Spain's sovereign risk premium rises sharply to above 310bp
as Portugal's increases by 200bp to over 800bp;

Jornal de Negocios editorial says the crisis will not lead to changes in austerity policies, and a new Socialist PM would also be bound by his support of the programme in the past;

Joana Gorjão Henriques of the Guardian says Portugal, like Italy and Greece, live in troikaland, where the prime minister does not matter;



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