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Portugal bailout could reach €90bn

Officials in Brussels and Germany expected to demand big reforms in return for rescue package bigger than Ireland’s Portugal’s bailout requirement is 20% higher than previously thought, with hidden debt in state companies and private-public partnerships possibly to blame, according to sources in Lisbon. Officials plan to ask for a €90bn (£79bn) bailout, making it an even larger aid package than the €85bn granted to Ireland, according to respected business daily Diario Económico. Previous reports had suggested Portugal required around €75bn. The extra cash is needed, it is said, to cover government debt, state companies that are having trouble paying employees and the possible recapitalisation of Portuguese banks after future stress tests. The request would signal deeper debt problems buried inside the Portuguese administration, with economist Nuno Garoupa pointing to both troubled public companies and a lack of reporting on the state of public-private partnerships covering hospitals and roads which will not be revealed until 2013. Many economists believe that these hidden elements drive the country’s real debt up towards 120% of GDP, rather than the 85% figure given by the government. “This is an open secret,” said economist João César das Neves of Lisbon’s Catholic University. “Europe knows it already.” It is also unclear how a rudderless country with a caretaker government led by the outgoing Socialist prime minister José Socrates would set about negotiating a bailout. A formal request for aid was to be delivered to Brussels tonight, cabinet minister Pedro Silva Pereira told reporters. With fresh elections due on 5 June, the Socialists and the centre-right opposition Social Democrats are both anxious to pass responsibility for the bailout on to their opponents. Socrates is said to favour taking up to a third of the total money in the coming weeks to tide the country over until a new government is installed. That government, which opinion polls show would probably be led by the Social Democrats, could then negotiate the rest. But the Social Democrats are said to be pressing for the caretaker government to take the full bailout, so that blame for the strict conditions that will accompany it can fall on Socrates’ party. Either way, an opinion poll run this week by the Diario de Noticias newspaper showed that a minority government is the most likely outcome – meaning that the two parties will have to come to some agreement. The Portuguese president Aníbal Cavaco Silva would play a crucial role in bringing the two biggest parties together. Officials in Brussels and Germany’s chancellor, Angela Merkel, are also expected to intervene to demand major reforms of the Portuguese economy, which has grown by an average of just 0.7% a year over the past decade. The senior German lawmaker Volker Wissing, chairman of his parliament’s finance committee, noted that Portuguese MPs had rejected Socrates’ latest austerity measures. “Now they’ll be determined from outside,” he said. The parties are already blaming one another for the spiralling cost of Portuguese debt, which forced Socrates to turn to the European Union for a bailout on Wednesday night. The Social Democrats had refused to back a Socrates austerity package which was presented to parliament on 23 March, bringing his government down. Questions also remained over whether either party was capable of pushing through structural reforms that would allow the country to grow. Prof Garoupa, who teaches at Illinois University, said that Portugal was in a worse state than Ireland and Spain because it had spent its EU funds on consumption rather than investment and so had little potential for growth. “We face another decade without growth,” he said. Other economists said growth could come much earlier if the bailout is accompanied by meaningful spending cuts and reforms. Portugal’s economy is already expected to fall back into recession this year, shrinking by around 1%. The country’s hard left is already getting ready to battle further cuts in a country that has passed three austerity packages since the debt crisis first began. “We will present a plan in response to the debt situation,” said Francisco Louá, of the Left Block. Business leaders and Portuguese bankers welcomed the bailout, agreeing that it had become inevitable. Portugal Europe Europe European Union Economics Global economy Giles Tremlett guardian.co.uk

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Portugal bailout could reach €90bn

Officials in Brussels and Germany expected to demand big reforms in return for rescue package bigger than Ireland’s Portugal’s bailout requirement is 20% higher than previously thought, with hidden debt in state companies and private-public partnerships possibly to blame, according to sources in Lisbon. Officials plan to ask for a €90bn (£79bn) bailout, making it an even larger aid package than the €85bn granted to Ireland, according to respected business daily Diario Económico. Previous reports had suggested Portugal required around €75bn. The extra cash is needed, it is said, to cover government debt, state companies that are having trouble paying employees and the possible recapitalisation of Portuguese banks after future stress tests. The request would signal deeper debt problems buried inside the Portuguese administration, with economist Nuno Garoupa pointing to both troubled public companies and a lack of reporting on the state of public-private partnerships covering hospitals and roads which will not be revealed until 2013. Many economists believe that these hidden elements drive the country’s real debt up towards 120% of GDP, rather than the 85% figure given by the government. “This is an open secret,” said economist João César das Neves of Lisbon’s Catholic University. “Europe knows it already.” It is also unclear how a rudderless country with a caretaker government led by the outgoing Socialist prime minister José Socrates would set about negotiating a bailout. A formal request for aid was to be delivered to Brussels tonight, cabinet minister Pedro Silva Pereira told reporters. With fresh elections due on 5 June, the Socialists and the centre-right opposition Social Democrats are both anxious to pass responsibility for the bailout on to their opponents. Socrates is said to favour taking up to a third of the total money in the coming weeks to tide the country over until a new government is installed. That government, which opinion polls show would probably be led by the Social Democrats, could then negotiate the rest. But the Social Democrats are said to be pressing for the caretaker government to take the full bailout, so that blame for the strict conditions that will accompany it can fall on Socrates’ party. Either way, an opinion poll run this week by the Diario de Noticias newspaper showed that a minority government is the most likely outcome – meaning that the two parties will have to come to some agreement. The Portuguese president Aníbal Cavaco Silva would play a crucial role in bringing the two biggest parties together. Officials in Brussels and Germany’s chancellor, Angela Merkel, are also expected to intervene to demand major reforms of the Portuguese economy, which has grown by an average of just 0.7% a year over the past decade. The senior German lawmaker Volker Wissing, chairman of his parliament’s finance committee, noted that Portuguese MPs had rejected Socrates’ latest austerity measures. “Now they’ll be determined from outside,” he said. The parties are already blaming one another for the spiralling cost of Portuguese debt, which forced Socrates to turn to the European Union for a bailout on Wednesday night. The Social Democrats had refused to back a Socrates austerity package which was presented to parliament on 23 March, bringing his government down. Questions also remained over whether either party was capable of pushing through structural reforms that would allow the country to grow. Prof Garoupa, who teaches at Illinois University, said that Portugal was in a worse state than Ireland and Spain because it had spent its EU funds on consumption rather than investment and so had little potential for growth. “We face another decade without growth,” he said. Other economists said growth could come much earlier if the bailout is accompanied by meaningful spending cuts and reforms. Portugal’s economy is already expected to fall back into recession this year, shrinking by around 1%. The country’s hard left is already getting ready to battle further cuts in a country that has passed three austerity packages since the debt crisis first began. “We will present a plan in response to the debt situation,” said Francisco Louá, of the Left Block. Business leaders and Portuguese bankers welcomed the bailout, agreeing that it had become inevitable. Portugal Europe Europe European Union Economics Global economy Giles Tremlett guardian.co.uk

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Turkish peace plan for Libya to be put to Gaddafi

Rebels also ‘positive’ about three-point plan after separate meeting with Turkish officials Turkey has proposed a path to a peaceful resolution to the deadlocked conflict in Libya, involving a withdrawal by Muammar Gaddafi’s forces from cities held by the rebels, and democratic reform. Recep Tayyip Erdogan, the Turkish prime minister, has outlined the proposal in Ankara, saying: “We are working on the details of this roadmap.” It would include humanitarian corridors in Libya, he said. Turkey, which this week hosted an envoy from the Gaddafi regime, the new foreign minister, Abdel Ati al-Obeidi, said the measures would be discussed at an international meeting on Libya in Qatar next week. The US, European countries and Middle Eastern allies will take part. Obeidi was reported to be floating ideas for a three-country tour in search of a political solution, with Gaddafi staying in power while constitutional reforms were introduced. Libya’s opposition and the international coalition reject any plan involving Gaddafi remaining in power. Erdogan outlined three elements to his proposal: a ceasefire in the cities surrounded by Gaddafi’s forces, including Misrata; a humanitarian corridor to allow aid to enter, co-ordinated with Tripoli; and negotiations leading to a new political process in Libya, including free elections. Sources close to Erdogan said he had discussed the proposal with Obeidi, who would take the message back to Tripoli. The Turkish government also met Mustafa Abdul Jalil, the chairman of the rebel council, in Doha recently. Jalil was said to have been “positive” about the proposal. Meanwhile, Nato is investigating a claim by Libyan rebels that a botched air strike has killed at least 13 of its fighters as the west scrambled to deal with what commanders admit is a flaw in communications with rebels on the battlefield. The revolutionary leadership sought to defuse anger at Nato over the strike near the frontline town of Brega, where several missiles hit rebel tanks, by claiming that it was carried out by Gaddafi’s air force. That appeared unlikely given the imposition of the no-fly zone and the destruction of his air defences in recent days. The Nato aircraft appear not to have been informed that, for the first time, rebels had moved several tanks, rocket launchers and other armour up to the frontline . All of it was seized from government forces and therefore was indistinguishable from Gaddafi’s weaponry. But the second Nato attack on rebel forces in less than a week deepened anger and suspicion about the actions of the alliance, which is accused in rebel-held areas of abandoning the fight against Gaddafi. Nato had been keen to assuage those concerns by demonstrating that it is still taking on the Libyan leader’s army. A rebel commander, Ayman Abdul-Karim, told the Associated Press that he had seen air strikes hit tanks and a rebel convoy, including a bus carrying fighters toward Brega. He and other rebels described dozens killed or wounded. Rebel fighters who saw the strike were furious. “Nato are liars. They are siding with Gaddafi,” said Salem Mislat. Thirteen people, including three doctors, died last Friday in a western air raid after rebels opened fire with an anti-aircraft gun while a Nato plane was overhead. Yesterday’s incident came as western powers tried to improve slow communications between the rebels and Nato commanders, who are receiving old information about the situation on the ground. A fresh assault by Gaddafi’s forces appeared to be pushing the revolutionaries back once again. The government army advanced close enough to Ajdabiya, the last main town before the revolutionaries’ de facto capital, Benghazi, to shell its western gate. That sent people fleeing in their thousands from Ajdabiya, which has changed hands several times. The revolutionaries’ military problems are being compounded by a looming economic crisis. Western governments that have established diplomatic ties with the revolutionary council are now urgently trying to find ways to legally get frozen Libyan assets to the rebel administration, which says it has less than a fortnight’s cash available. The matter is complicated by UN sanctions against Libyan state bodies, which appear to prevent western governments from transferring funds in to banks even in rebel-held territory. The US holds about £20bn in Libyan assets and Britain has several billion, but officials say releasing the funds is proving legally complicated. The economic crisis is likely to be compounded by plunging oil production that was cut further on Wednesday by an attack on a pumping station. Nato dismissed the regime’s claims that British planes were responsible for the attack, saying it was carried out by Gaddafi’s forces. The American general who heads the US’s Africa command, Carter Ham, told Congress that he believes the conflict is settling into a stalemate. He advised against providing weapons to the rebels until the US is confident about who exactly they are, amid warnings from other members of the American military about ties to Islamist extremists. However, that concern is rapidly receding among western diplomats dispatched to Benghazi to deal with the rebels who say that they have been impressed by a commitment to creating a free and democratic society. Libyan spokesman Musa Ibrahim said he was not aware of the details of the plan, but added: “We are open to all proposals for reform from within Libya.” Libya Middle East Turkey Nato Muammar Gaddafi Chris McGreal Seumas Milne Harriet Sherwood guardian.co.uk

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Turkish peace plan for Libya to be put to Gaddafi

Rebels also ‘positive’ about three-point plan after separate meeting with Turkish officials Turkey has proposed a path to a peaceful resolution to the deadlocked conflict in Libya, involving a withdrawal by Muammar Gaddafi’s forces from cities held by the rebels, and democratic reform. Recep Tayyip Erdogan, the Turkish prime minister, has outlined the proposal in Ankara, saying: “We are working on the details of this roadmap.” It would include humanitarian corridors in Libya, he said. Turkey, which this week hosted an envoy from the Gaddafi regime, the new foreign minister, Abdel Ati al-Obeidi, said the measures would be discussed at an international meeting on Libya in Qatar next week. The US, European countries and Middle Eastern allies will take part. Obeidi was reported to be floating ideas for a three-country tour in search of a political solution, with Gaddafi staying in power while constitutional reforms were introduced. Libya’s opposition and the international coalition reject any plan involving Gaddafi remaining in power. Erdogan outlined three elements to his proposal: a ceasefire in the cities surrounded by Gaddafi’s forces, including Misrata; a humanitarian corridor to allow aid to enter, co-ordinated with Tripoli; and negotiations leading to a new political process in Libya, including free elections. Sources close to Erdogan said he had discussed the proposal with Obeidi, who would take the message back to Tripoli. The Turkish government also met Mustafa Abdul Jalil, the chairman of the rebel council, in Doha recently. Jalil was said to have been “positive” about the proposal. Meanwhile, Nato is investigating a claim by Libyan rebels that a botched air strike has killed at least 13 of its fighters as the west scrambled to deal with what commanders admit is a flaw in communications with rebels on the battlefield. The revolutionary leadership sought to defuse anger at Nato over the strike near the frontline town of Brega, where several missiles hit rebel tanks, by claiming that it was carried out by Gaddafi’s air force. That appeared unlikely given the imposition of the no-fly zone and the destruction of his air defences in recent days. The Nato aircraft appear not to have been informed that, for the first time, rebels had moved several tanks, rocket launchers and other armour up to the frontline . All of it was seized from government forces and therefore was indistinguishable from Gaddafi’s weaponry. But the second Nato attack on rebel forces in less than a week deepened anger and suspicion about the actions of the alliance, which is accused in rebel-held areas of abandoning the fight against Gaddafi. Nato had been keen to assuage those concerns by demonstrating that it is still taking on the Libyan leader’s army. A rebel commander, Ayman Abdul-Karim, told the Associated Press that he had seen air strikes hit tanks and a rebel convoy, including a bus carrying fighters toward Brega. He and other rebels described dozens killed or wounded. Rebel fighters who saw the strike were furious. “Nato are liars. They are siding with Gaddafi,” said Salem Mislat. Thirteen people, including three doctors, died last Friday in a western air raid after rebels opened fire with an anti-aircraft gun while a Nato plane was overhead. Yesterday’s incident came as western powers tried to improve slow communications between the rebels and Nato commanders, who are receiving old information about the situation on the ground. A fresh assault by Gaddafi’s forces appeared to be pushing the revolutionaries back once again. The government army advanced close enough to Ajdabiya, the last main town before the revolutionaries’ de facto capital, Benghazi, to shell its western gate. That sent people fleeing in their thousands from Ajdabiya, which has changed hands several times. The revolutionaries’ military problems are being compounded by a looming economic crisis. Western governments that have established diplomatic ties with the revolutionary council are now urgently trying to find ways to legally get frozen Libyan assets to the rebel administration, which says it has less than a fortnight’s cash available. The matter is complicated by UN sanctions against Libyan state bodies, which appear to prevent western governments from transferring funds in to banks even in rebel-held territory. The US holds about £20bn in Libyan assets and Britain has several billion, but officials say releasing the funds is proving legally complicated. The economic crisis is likely to be compounded by plunging oil production that was cut further on Wednesday by an attack on a pumping station. Nato dismissed the regime’s claims that British planes were responsible for the attack, saying it was carried out by Gaddafi’s forces. The American general who heads the US’s Africa command, Carter Ham, told Congress that he believes the conflict is settling into a stalemate. He advised against providing weapons to the rebels until the US is confident about who exactly they are, amid warnings from other members of the American military about ties to Islamist extremists. However, that concern is rapidly receding among western diplomats dispatched to Benghazi to deal with the rebels who say that they have been impressed by a commitment to creating a free and democratic society. Libyan spokesman Musa Ibrahim said he was not aware of the details of the plan, but added: “We are open to all proposals for reform from within Libya.” Libya Middle East Turkey Nato Muammar Gaddafi Chris McGreal Seumas Milne Harriet Sherwood guardian.co.uk

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Tragedy in Brazil: A former student killed at least 12 people at an elementary school in Rio de Janeiro this morning. Wellington Menezes de Oliveira, 24, brought two loaded 38-caliber revolvers into the school and opened fire before shooting himself, say police. He reportedly left a note outlining his desire…

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Clad in protective suits, some 340 police officers began the search for bodies within the 12-mile evacuation zone surrounding the Fukushima plant today. Nearly four weeks have passed since the earthquake, and some 4,200 who lived within the zone remain missing, reports the New York Times . Officials now say…

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Anthony Smith was in high spirits as arrived in St. Maarten yesterday, and why not? After all, he’d just realized a boyhood dream, sailing a 40-foot raft on a two-month journey across the Atlantic with the help of three of his friends—at the ripe young age of 85. “Some…

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The number of families who chose the name “Palin” for their babies in 2008: three per million. The number in 2009? Twenty per million, according to the BabyCenter website. A good bump, but not exactly the hot new baby name, a naming expert tells Today . Despite the jump in “Palin”…

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Clinton the role model for Queen

In carefully balanced trip Queen will pay respects to Irish soldiers who fought the British crown and others who wore its uniform Bill Clinton displayed a deft touch in 1995 when he became the first US president to visit Northern Ireland since the start of the Troubles. Political leaders from all sides swooned as a carefully orchestrated White House operation ensured that Clinton met each one of them in a way that made them all feel special. Buckingham Palace has clearly paid attention to Clinton’s ground breaking visit to Northern Ireland in the early years of the peace process as the Queen prepares to make history by becoming the first British monarch to visit the Irish Republic. The Queen will visit a series of sights which symbolise the complexity of Anglo-Irish relations and explain why no British monarch has stepped onto the soil of any of the 26 counties since George V visited Dublin in 1911. In those days it was part of the UK. The complexity of relations between the two islands will be shown soon after the Queen arrives in Dublin when she is formally received by Mary McAleese, the Irish president, at her formal residence, Áras an Uachtaráin. McAleese was technically born as a subject of the Queen’s father, George VI, in Belfast in 1951. This is how the trip, which will take place between 17-20 May, has been balanced: Nationalist Ireland • A tour of Dublin’s Garden of Remembrance. The Queen’s grandfather George V would probably utter an expletive to beat his famous ‘Bugger Bognor’ outburst if he knew that Lillibet, who was ten when he died in 1936, is to visit the garden that commemorates the Irish Republicans who tried to overthrow his rule over Ireland in the sixth year of his reign in the 1916 Easter Rising. • A visit to Croke Park, home of Gaelic Athletic Association (GAA) sports which are one of the main symbols of nationalist Ireland. The modern world was introduced to the significance of Croke Park in the Liam Neeson Michael Collins film which depicted the 1920 Bloody Sunday shootings. British troops fired on a gaelic football match, killing 14 people. It was only in 2005 that the GAA relaxed its famous Rule 42, which banned the playing of ‘garrison games’ (rugby and soccer) on its grounds. Anglo-Ireland • A tour of the Islandbridge National War Memorial Gardens in Dublin. The gardens commemorate the thousands of Irish soldiers who died in British or allied uniforms during the first and second world wars. Eamon de Valera, who famously passed on his condolences to the German legation in Dublin when Adolf Hitler died, was supportive of the site. But it was not until 1995 that a Taoiseach (John Bruton) formally visited the gardens. • Visits to Trinity College Dublin, which educated generations of Anglo-Irish professionals, and to the home Guinness which was traditionally associated with the Protestant community. Everyone’s Ireland, good and bad • The Rock of Cashel. This takes everyone’s breath away as it comes into view on the main road from Dublin to Cork. Once the seat of the Kings of Munster, this is the pride of all traditions in Ireland. But it did play host to Anglo-Irish battles when it was sacked by English Parliamentarian troops in 1647 during the Irish Confederate Wars A visit by the Queen to the Irish Republic has always been seen (excuse the pun) as the crowning moment in the peace process that sets the seal on the full normalisation in relations between the United Kingdom and the Irish Republic. Julian King, the British ambassador to Ireland, hailed the visit as an historic moment: The State Visit programme announced by Buckingham Palace and Áras an Uachtaráin is a wide-ranging and exciting celebration of the close ties between our two countries. Her Majesty and The Duke of Edinburgh will be able to experience at first hand the vibrant links that make our relationship with Ireland so important. This is a historic visit that also celebrates our close modern partnership. But will a tradition of state visits by the Queen be maintained? British ambassadors in post during a state visit by the Queen are usually knighted. But would it be right to bump up Julian King, who is already a CMG (Call Me God), to the full status of KCMG (Kindly Call Me God) after a trip to the 26 counties whose independent republican citizens have taken a dim view of British gongs? The Queen Ireland Northern Ireland Bill Clinton Nicholas Watt guardian.co.uk

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Clinton the role model for Queen

In carefully balanced trip Queen will pay respects to Irish soldiers who fought the British crown and others who wore its uniform Bill Clinton displayed a deft touch in 1995 when he became the first US president to visit Northern Ireland since the start of the Troubles. Political leaders from all sides swooned as a carefully orchestrated White House operation ensured that Clinton met each one of them in a way that made them all feel special. Buckingham Palace has clearly paid attention to Clinton’s ground breaking visit to Northern Ireland in the early years of the peace process as the Queen prepares to make history by becoming the first British monarch to visit the Irish Republic. The Queen will visit a series of sights which symbolise the complexity of Anglo-Irish relations and explain why no British monarch has stepped onto the soil of any of the 26 counties since George V visited Dublin in 1911. In those days it was part of the UK. The complexity of relations between the two islands will be shown soon after the Queen arrives in Dublin when she is formally received by Mary McAleese, the Irish president, at her formal residence, Áras an Uachtaráin. McAleese was technically born as a subject of the Queen’s father, George VI, in Belfast in 1951. This is how the trip, which will take place between 17-20 May, has been balanced: Nationalist Ireland • A tour of Dublin’s Garden of Remembrance. The Queen’s grandfather George V would probably utter an expletive to beat his famous ‘Bugger Bognor’ outburst if he knew that Lillibet, who was ten when he died in 1936, is to visit the garden that commemorates the Irish Republicans who tried to overthrow his rule over Ireland in the sixth year of his reign in the 1916 Easter Rising. • A visit to Croke Park, home of Gaelic Athletic Association (GAA) sports which are one of the main symbols of nationalist Ireland. The modern world was introduced to the significance of Croke Park in the Liam Neeson Michael Collins film which depicted the 1920 Bloody Sunday shootings. British troops fired on a gaelic football match, killing 14 people. It was only in 2005 that the GAA relaxed its famous Rule 42, which banned the playing of ‘garrison games’ (rugby and soccer) on its grounds. Anglo-Ireland • A tour of the Islandbridge National War Memorial Gardens in Dublin. The gardens commemorate the thousands of Irish soldiers who died in British or allied uniforms during the first and second world wars. Eamon de Valera, who famously passed on his condolences to the German legation in Dublin when Adolf Hitler died, was supportive of the site. But it was not until 1995 that a Taoiseach (John Bruton) formally visited the gardens. • Visits to Trinity College Dublin, which educated generations of Anglo-Irish professionals, and to the home Guinness which was traditionally associated with the Protestant community. Everyone’s Ireland, good and bad • The Rock of Cashel. This takes everyone’s breath away as it comes into view on the main road from Dublin to Cork. Once the seat of the Kings of Munster, this is the pride of all traditions in Ireland. But it did play host to Anglo-Irish battles when it was sacked by English Parliamentarian troops in 1647 during the Irish Confederate Wars A visit by the Queen to the Irish Republic has always been seen (excuse the pun) as the crowning moment in the peace process that sets the seal on the full normalisation in relations between the United Kingdom and the Irish Republic. Julian King, the British ambassador to Ireland, hailed the visit as an historic moment: The State Visit programme announced by Buckingham Palace and Áras an Uachtaráin is a wide-ranging and exciting celebration of the close ties between our two countries. Her Majesty and The Duke of Edinburgh will be able to experience at first hand the vibrant links that make our relationship with Ireland so important. This is a historic visit that also celebrates our close modern partnership. But will a tradition of state visits by the Queen be maintained? British ambassadors in post during a state visit by the Queen are usually knighted. But would it be right to bump up Julian King, who is already a CMG (Call Me God), to the full status of KCMG (Kindly Call Me God) after a trip to the 26 counties whose independent republican citizens have taken a dim view of British gongs? The Queen Ireland Northern Ireland Bill Clinton Nicholas Watt guardian.co.uk

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