Mario Draghi says that Portugal achieved “remarkable progress” that “must be recognized”, when asked about the possibility of a cut “rating by DBRS, and in particular since the swearing in of the new government, have expressed concern about the direction of policies in Portugal. The ECB president added that trust in the Executive branch to know how to identify the challenges ahead, in particular regarding the reduction in the level of bad debt in Portugal, which also coincides with the areas for which Mário Centeno is to give priority in Lisbon.
Asked about the effects of a lowering of the credit rating agencies” nationally by the DBRS in the decision scheduled for Friday, November 21, Draghi repeated that the rules of the central bank establish that a cut in the rating of the canadian company would dictate the exclusion of the national debt-buying program of the ECB debt (leaving also be accepted as collateral in liquidity-providing operations), but added then that the DBRS has an “outlook” to stable on the rating on the national debt. An “outlook” stable reduces the probability of a cut of “rating” tomorrow, since the agencies tend, in way of warning, the download the “Outlook” to negative a few months before deciding to cut the rating.
More important than the technical detail used by the President of the ECB was the support then offered to the Government, and whose terms did remember judgements which in the past has made to the government of Passos Coelho.
“we Must recognize that progress was made notable in Portugal,” he said, adding that the Executive is aware of the great challenges that the country faces: “There are vulnerabilities that the government knows well. The government is well aware of the need of ambitious reforms” in the country, and from our side, the priorities are ” the restructuring of the debt business and deal with the problem of non-performing loans,” he argued.
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