Is Portugal's S&P rating cause for celebration?

Portugal's creditworthiness has improved, according to rating agency Standard & Poor's (S&P). By raising the country's rating by a notch to BBB- on Friday it released it from junk status, triggering a rush on Portuguese bonds. But the joy over this news is not unclouded.

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Jornal de Negócios (PT) /

Why did it take so long?

The upgrade in Portugal's credit rating comes far too late, Jornal de Negócios criticises:

“S&P's decision to raise Portugal's bonds from junk status would already have been justified at a much earlier stage - when the adjustment programme [agreed with the troika] ended in 2014, and even more so since Prime Minister António Costa and his finance minister Mário Centeno clearly showed in 2016 that the new socialist minority government and its partners [in parliament] are taking budget control and the restructuring of the financial system seriously.”

Financial Times (GB) /

ECB must not smother recovery

For the Financial Times Portugal is the most recent example of how quantitative easing is the main factor that has helped Europe put the financial crisis behind it:

“It remains desirable for the ECB to keep interest rates low for as long as possible. Labour markets remain fragile, public debt high and there is no guarantee that the global environment will remain as favourable as it is now. Moreover, there is little sign of inflationary pressures that would force policymakers to take action. ... The eurozone's fortunes have been transformed in the past few years. The ECB has been instrumental. It cannot be assumed that this recovery will continue without careful husbanding.”

Público (PT) /

Good news at the right moment

The timing of the upgrade is very fortunate for Portugal's socialist minority government, Público notes:

“The 'majestic' decision of one of the most feared rating agencies was received with a sigh of relief in Portugal. The IMF's latest report, which talks of 'noteworthy progress' in Portugal's economic performance makes the picture even rosier. ... The timing of this good news couldn't be better for Portugal's government: not just because the imminent local elections on October 1 or the difficult budget debate with the left-wing parties [in parliament], but also because social tensions are beginning to emerge once more, with the nurses' strike being just the most evident example.”

Neue Zürcher Zeitung (CH) /

Not out of the woods yet

Portugal hasn't quite escaped the danger zone yet, warns the Neue Zürcher Zeitung:

“The government is putting the final touches to the draft budget for 2018 and still doesn't have enough leeway to respond to all the calls for charity. At around 130 percent of the GDP, public debt also remains a risk. True, the European Central Bank's bond buying, which up to now had only been possible because DBRS kept its credit rating above junk status, comes as a relief. Now Portugal is no longer hanging on the thread of that one agency. But how long the bond-buying programme will last is an open question. So it's still too early for wild celebrations at this point.”

Diário de Notícias (PT) /

Rating agencies are the scum of the system

Diário de Notícias has nothing good to say about the rating agencies or their ratings:

“The national rejoicing over S&P's decision is just further proof that we have learned nothing from the financial crisis of the last few years. ... The rating agencies are private companies that are financed by other companies, banks and states which they then give ratings to. These ratings depend on criteria that no one knows about - but which supposedly have to do with the 'sustainability of state finances' and 'growth potential'. ... [Rating agencies] put some countries on a pedestal and send others (like Greece and Portugal) to their doom. They are the most despicable scum of an irrational and unjust economic paradigm that continues to claim victims the world over.”