Open Europe: Portugal must restructure its debt

Raoul Ruparel, Open Europe’s economic analyst, commented on Portugal’s bail-out request:

“A bail-out of Portugal now looks virtually inevitable. But the cases of Ireland and Greece clearly illustrate that the EU’s strategy – to throw good money after bad – is failing. Rather than simply taking a bail-out, it would be better in the long run for Portugal to restructure its debt.

“The UK may be forced to contribute to a bail-out of Portugal, since it doesn’t have a veto over the EU bail-out fund that it’s liable for. However, a Portuguese bail-out without a restructuring wouldn’t be in the UK’s interest, as it fails to tackle the long term problems of both Portugal and the eurozone.”