All eyes on ECB after debt sale

Julian Harris
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THE European Central Bank (ECB) will today reveal if it intervened in the Portuguese debt sale at the end of last week, when €1.645bn (£1.45bn) in short-dated bonds were sold.

The sales came with a yield of 5.793 per cent -- below the secondary market level of seven per cent, but 2.5 per cent higher than Portugal paid at auctions of similar bonds last year.

While the sale raised cash, analysts point to high borrowing costs and tumbling confidence in the peripheral Eurozone state, which is edging closer to a bailout.

Prime Minister Jose Socrates’ resignation, following parliament’s rejection of his latest austerity package, has sparked a snap election to be held on 5 June.

Meanwhile, the International Monetary Fund (IMF) has vehemently denied suggestions that it was privately pressing troubled Greece to restructure its debt.

“The IMF supports the Greek government’s position of no debt restructuring and its determination to fully service its debt obligations,” an IMF spokeswoman said.

Greece and Ireland can both sustain their governments’ debts, Klaus Regling, head of the European Financial Stability Facility, said last week.