Midtown Blogger/Manhattan Valley Follies: Die Welt- The New Greece

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It could have been anything so beautiful. The euro zone had finally found their model country, a nation that proved to be the perfect anti-Greece as good crisis management works: Portugal. But that could now be over, no longer serve as a blueprint for Lisbon Brussels. On the contrary: On Tuesday threatens the political upheaval. A second Greece could then be made of the anti-Greece.

In the financial markets, the ever-sensitive to political risks that players sold on Monday hectic their Portugal-Investments. Yields on ten-year government bonds shot up to 2,879 per cent in the level, the highest level in nearly four months. The stock exchange in Lisbon slipped by more than two percent.

Investors fear a fall of the center-right government of Prime Minister Pedro Passos Coelho. This had in the elections in early October just barely missed the majority. Nevertheless, Portugal's President Aníbal Cavaco Silva had also commissioned to pressure from Brussels Coelho to form a government.

Left wants to overthrow the government

Now the opposition forces in parliament, the Socialists, the Left Bloc and the Communists have agreed to topple the minority government to take power themselves. Together has the motley crew of over 122 230 seats. Failure to achieve Coelho to draw eight opposition parliamentarians on his side, his end is sealed - and thus also its reform program.

The experts of the American banking giant Citi speak of a "left Coup" which begins to take shape - with dramatic consequences."We have warned in the summer that Portugal could be the next Greece. These fears could now become a reality," write the Citi experts.

In fact, Portugal and Greece have been at first glance some similarities. Both countries have about ten million people, generating over 170 billion euros and sitting on debts that exceed their annual economic output far.Both suffer from similar structural problems and had to be rescued by the euro zone with billions. Now the political direction could converge, including hard clashes with Brussels and turmoil in financial markets.

Months of negotiation poker

The party program of the Portuguese left parties reads like a copy of the plans of Syriza movement in Greece. The Portuguese Communists want to end the restrictions imposed by international donors strict austerity measures, to turn back reforms and make wage cuts reversed. Nationally, expected to increase to 600 euros, the monthly minimum wage from the current 505 euros.

Especially Brussels the new exchange rate should not like. Well imagine that a negotiation for months Poker follows. Portugal has still not submitted as required by its budget plans.Although Coelho's government program also envisages tax cuts and a slight increase in the minimum wage. But the budget deficit should be in the coming year, with 2.7 per cent below the EU limit of three percent.

If the left-wing parties come into power, the debt forecasts would lapse. Although Portugal has now left the rescue and is no longer dependent on loans of the euro countries.However, the country is one of the most indebted of the currency area. The government debt ratio is 127 percent, one adds the liabilities of banks, households and companies should, Portugal is even worse with a rate of over 500 percent since than, for example Greece, which only comes to 400 percent.

No more star pupil

"Portugal is thus highly vulnerable to the risk assessment of the markets," said Alberto Gallo, a strategist at the Royal Bank of Scotland. Previously, the country had a reputation as a model pupil. Now the image could change abruptly. "The country is just beginning its reform process. For example, banks are not yet restructured," says Gallo.

Especially from one side threatening trouble.The rating agency DBRS could Portugal "scrap" downgrade after a political upheaval in the category. While DBRS competitor Fitch, S & P and Moody's lead the country already as "junk", but the European Central Bank (ECB) applies as a criterion for its bond purchases and the DBRS rating with a.Should Portugal slip even here, the ECB could not buy Portugal Papers more within their bond purchase program and the Portuguese banks could submit no more government bonds as collateral in its Governing shops.

What happens then showed up in Greece. When the ECB Greek papers no longer accepted in February, yields shot up. This was followed by turmoil that were felt throughout the euro zone.

Yet the political coup is not. Should Coelho did not give a majority for his government's program in parliament, President Silva, the left does not necessarily mandate to form a government. He could also use Coelho as a transitional government and call for new elections. That would be another coup.As a model student, the country no longer is good either way.