ECONOMY

In Brief

Portugal calls top-level meeting on finances LISBON (Reuters) – President Anibal Cavaco Silva summoned Portugal’s major political parties for talks next week after the main opposition party ruled out an early deal on the 2011 budget and bond spreads hit new highs. The president’s office said in a statement yesterday he would meet separately with all six parties represented in Parliament between September 28 and 29 «in order to sound out the political, economic and social situation.» Investors have been scrutinizing Portugal’s public finances for months, seeing the country, along with Ireland, as the next weak link in the eurozone after Greece. Although the president has largely a ceremonial post, the formal head of state can play an important role as a mediator and moderator in the political debate at times of discord. He has previously called on the minority Socialist government and the opposition to come to terms on the budget. Cavaco Silva, who faces an election in early 2011, is a former prime minister for the center-right Social Democratic Party (PSD), now the main opposition party. Bulgaria revises growth data for first quarter lower SOFIA (Reuters) – The Bulgarian statistics office said yesterday it had revised its gross domestic product data to show the economy contracted less in the first quarter than was initially thought. The Balkan country’s economy shrank by a revised 3.2 percent on an annual basis in the first three months of 2010, slightly less than the 3.6 percent contraction reported earlier. The economy remained in recession in the second quarter but the contraction slowed to 1.4 percent, mainly due to a pickup in industry. The global crisis put an end to 12 years of growth in Bulgaria. The emerging economy contracted 5.0 percent last year and the center-right government expects 0.7 percent growth for 2010. Ireland not Greece Ireland is «very unlikely» to experience a financial crisis as severe as the one that forced Greece to seek an international bailout earlier this year, said Goldman Sachs Group Inc. «A repeat of the Greek debt turmoil in Ireland is very unlikely,» Michael Vaknin, a senior fixed-income strategist at Goldman in London, said in an e-mailed note. «With Irish spreads already at all-time highs, we would argue that refinancing risks in the Irish debt market is aggressively priced in already.» The extra yield that investors demand to hold Irish bonds over German bunds has surged to a record as investors fret about the country’s ability to cap the cost of its bank bailout and cut the budget deficit. The spread yesterday widened 12 basis points to 430 bps and has swelled 112 bps in the past month. Ireland’s economy contracted 1.2 percent in the second quarter from the previous three-month period and Goodbody Stockbrokers said today that the government may need to step up its austerity drive in December’s budget. Finance Minister Brian Lenihan said it’s «too early» to signal a tougher budget for next year. He has pledged to cut the deficit to 3 percent of gross domestic product by 2013 from 14 percent last year. (Bloomberg) Vivartia stocks Vivartia SA, Greece’s biggest food company, will hold an extraordinary general meeting on October 18 to discuss a proposal by Marfin Investment Group SA, the majority shareholder, to delist Vivartia from the Athens Stock Exchange, Vivartia commented yesterday in an Athens bourse filing. (Bloomberg) Fiscal flaws European Central Bank Governing Council member Athanasios Orphanides said the sovereign debt crisis is an opportunity to fix flaws in budget discipline in countries using the euro currency. Key elements to ensure progress are improved surveillance of countries with high debt levels or deficits, a credible enforcement mechanism that would act as a deterrent and better cooperation between members, Orphanides said in Athens yesterday, according to an e-mailed summary of his address. (Bloomberg)