Politics
Moody’s Warns Political Deadlock Threatens Portugal’s PRR Targets – Bonds
The postponement of the state budget to 2022, which should lead to the dissolution of parliament and the holding of early elections, jeopardizes the rating of the republic. Moody’s warns that political instability could lead to a failure to meet the budget targets that the country has taken on.
“Moody’s believes that the associated uncertainty [com o chumbo do OE 2022] negative for the rating because a political deadlock threatens to prevent the government from meeting its goals to receive future tranches of EU Next Generation Recovery Funding (NGEU), ”the agency warns in a note sent Friday to clients and is now publicly disclosed.
“Funding for NGEU is critical to Portugal’s economic growth,” Moody’s underlines, referring to the European base for recovery from the pandemic. This money, along with GDP, is also important for maintaining worldviewwhich Moody’s considers stable. The rating is at the investment grade Baa2.
Under NGEU, Portugal’s Program for Recovery and Resilience (PRR) has around € 14 billion in grants until 2026 (to which can be added the loans Portugal currently provides, divided by resilience, digitalization and climate change). …
The budget is “not particularly ascetic”
The national budgets of the government of Antonio Costa have been made possible since 2015 thanks to left-wing parties. This did not happen this year due to disagreements between PS and the PCP device partners and Bloco de Esquerda.
According to Moody’s, this was due to the Prime Minister’s decision to comply with labor laws, which the communists and blockists would like to abolish. The agency also emphasizes that the government’s budget proposal “was not particularly stringent” as it included increases in the national minimum wage, health care costs, old-age pensions and civil servants’ wages.
“In the absence of a new budget, the 2021 budget remains in effect. Support measures associated with the pandemic are being largely curtailed, so this financial impasse does not pose a particularly high risk to budgetary targets, ”Moody’s said in a statement.
In the leading budget, the Government has estimated the budget deficit for next year at 3.2%. Since parliament rejected the proposal, interest rates on Portugal’s public debt came under pressure. The trend continues this Monday, with the 10-year bond yield falling 6.7 basis points to 0.582%, close to the 0.6% mark last hit in May.
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Yesterday, financial agents evaluated the opposite decision of the Federal Supreme Court (STF) regarding the so-called secret budget. In addition, a decision was made by STF Minister Gilmar Méndez to issue an injunction that would exclude the Bolsa Família from the spending cap rule, with investors trying to understand how this measure would affect the processing of the transitional PEC in the Chamber of Deputies. Oh this PEC!!!!
Since he is an exchange investor, any reading that the budget will be exceeded or become more flexible will negatively affect the exchange market, whether through the PEC or in any other way. We will continue with volatility today.
Looking beyond, the US Central Bank (Fed), although slowing down the pace of monetary tightening at its December meeting, issued a tougher-than-expected statement warning that its fight against inflation was not yet over, raising fears that rising US interest rates will push the world’s largest economy into recession.
The currency market continues to react to political news. The voting on the PEC is saved for today. It is expected that it will indeed be reviewed to open the way tomorrow for discussions on the 2023 budget.
For today on the calendar we will have an index of consumer confidence in the eurozone. Good luck and good luck in business!!
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The former president of the Corinthians dreams of working for the CBF as a national team coordinator. He was consulted shortly after Lula’s election.
Former Corinthians president Andrés Sánchez was advised to take a position in the Ministry of Sports under the administration of Lula (PT). However, he ruled out a return to politics. dreams of taking over the coordination of CBF selectionHow do you know PURPOSE.
No formal invitation was made to the former Corinthian representative, only a consultation on a portfolio opportunity with the new federal government, which will be sworn in on January 1, 2023.
Andrés was the Federal MP for São Paulo from 2015 to 2019. At that time he was elected by the Workers’ Party. However, the football manager begs to stay in the sport, ruling out the possibility of getting involved in politics again.
Andrés Sanchez’s desire is to fill the position of CBF tackle coordinator, which should become vacant after the 2022 World Cup. Juninho Paulista fulfills this function in Brazil’s top football institution.
The former president of Corinthians was in Qatar to follow the World Cup along with other figures in Brazilian football. During his time in the country, he strengthened his ties with the top leadership of the CBF.
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The agreement was approved by a supermajority at a ministerial meeting of member states in Brussels, Belgium, after months of discussions about the best way to contain the rise in natural gas prices in the bloc caused by Russia’s invasion of Ukraine. .
The value set by the countries is well below the proposal made by the European Commission, the EU’s executive body, in November: 275 EUR/MWh. However, the countries leading the cap campaign were in favor of an even lower limit, around 100 EUR/MWh.
Germany, always wary of price controls, voted in favor of 180 euros, while Austria and the Netherlands, also skeptical of the cap, abstained. Hungary, the most pro-Russian country in the EU, voted against.
The instrument will enter into force on 15 February, but only if natural gas prices on the Amsterdam Stock Exchange exceed 180 euros/MWh for three consecutive days. In addition, the difference compared to a number of global benchmarks should be more than 35 euros.
Italy, the EU’s biggest supporter of the ceiling, has claimed responsibility for the measure. “This is a victory for Italy, which believed and worked for us to reach this agreement,” Environment and Energy Minister Gilberto Picetto tweeted.
“This is a victory for Italian and European citizens who demand energy security,” he added.
Currently, the gas price in Amsterdam is around 110 EUR/MWh, which is already a reflection of the agreement in Brussels – in August the figure even broke the barrier of 340 EUR/MWh.
However, Russia has already threatened to stop exports to countries that adhere to the ceiling. (ANSA).
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