Since receiving its bailout in 2011 Portugal has had to keep a tight rein on its finances while wrestling with recession, high unemployment and growing social unrest.
But now the man credited with keeping Portugal on the right track has stepped down from his post.
It was announced yesterday evening that Finance Minister Vitor Gaspar has resigned, amid concerns that his credibility has been damaged by his failure to reach debt and public deficit targets.
Although Portugal’s international creditors have praised his efforts, the populace have not and some of Gaspar’s measures were rejected by the constitutional court, leaving a gap to fill in the government’s finances.
In a letter to the Prime Minister Gasper stated: ‘The risks and challenges in coming times are enormous. They demand cohesion in government. It is my firm conviction that my departure will contribute to reinforce your leadership and the cohesion of the government.’
Gasper will be replaced by Treasury Secretary Maria Luis de Albuquerque, just in time for the next round of bailout reviews by the International Monetary Fund and the European Union.’
One industry expert said of the upheaval: ‘It’s a very big blow to the program at a very critical time. Gaspar’s reasons are the clearest indicator that the politics of the bailout are rapidly souring. The least we can expect is delays with the next review for the new minister to get the feet under the table. And market conditions are certainly not going to get better.’
During the North American session the Euro was able to climb against the Pound, briefly breaching the 86 pence resistance level before moving to trade within the region of 0.8580.
Movement in the EUR/GBP pairing is likely to occur today in response to UK construction PMI and Eurozone producer price data.
Euro (EUR) Exchange Rates
As of 08:50
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3072 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8580 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4225 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6780 >
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.3733 >