Half of Portugal’s debt tied up in sovereign bonds

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One half of Portugal’s national debt is tied up in Portuguese government treasury bonds.

No one knows exactly who holds these bonds — they vary from companies, international investors, insurance and pension funds, investment funds and banks, but the European Central Bank is Portugal’s largest creditor.

By June, Portugal’s total national public debt stood at €246Bn making it one of the most indebted countries in the world and far outstripping what the country can produce in a year.

In absolute terms, the State and public administration departments owe a staggering €246Bn in a country with just over 10 million inhabitants. (figures: Bank of Portugal).

Other countries such as Greece, Spain and Italy have greater debts than Portugal but in terms of population/the country’s ability to generate wealth, the problem is worse.

The ratio of Portuguese public debt stood at around 126.4% of GDP in March – the third largest in the Eurozone. The Government’s goal is to slash the debt to 102% by 2022.

According to Portuguese treasury reports (IGCP) the biggest holders of public debt are Portuguese families (national savings certificates), international investors such as investment funds and banks and the European Central Bank through its Euro Zone debt purchase plan.

Portugal also owes money to Europe (Financial Stability Mechanism Fund) and to the International Monetary Fund (IMF) which together with the European Central Bank form the troika of international lenders which lent Portugal €78Bn in 2011. This amount and other borrowing from official international institutions represents around 23% of Portugal’s debt.

Portugal also has debt tied up in short, medium and long-term market investor treasury bonds.

(6% and 5%)

At current rates, and without taking on any further debt, it will take until 2045 for Portugal to pay off all its debts