Portugal indicates China will continue financial support
Portugal's finance minister Fernando Teixeira dos Santos has indicated that China will continue to buy bonds from the eurozone member many investors believe could be the next in line for an EU-IMF bail-out.
"We took a big leap forward in terms of strengthening our relations at all levels, commercial and investment, and also in the area of financing," Mr Teixeira dos Santos said on Tuesday (14 December), according to Lusa, the Portuguese news agency.
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Mr Teixeira dos Santos is in Beijing as part of a two-day visit to drum up support for the struggling European economy, with Lisbon scheduled to return to international debt markets on Wednesday with an issue of up to €500 million in three-month treasury bills.
"China supports Portugal and will continue to support Portugal," Mr Teixeira dos Santos said, without specifying the amount of Portuguese treasury securities that Chinese institutions have already bought or will buy.
The Portuguese delegation met with Chinese finance minister Xie Xuren and Chinese central bank governor Zhou Xiaochuan as part of the visit.
Mr Teixeira dos Santos made a similar trip to Brazil last week as the government struggles to roll over debt obligations and rein in its budgetary deficit.
The country's Socialist prime minister, Jose Socrates, insisted on Monday that the government had taken important steps to improve the health of its public finances.
"We are dong what we need to do - consolidating the budget deficit very quickly and very effectively on the basis of structural reforms," he told the Financial Times.
As EU leaders prepare to meet in Brussels this week (16-17 December) to discuss setting up a permanent rescue mechanism for struggling eurozone states, Mr Socrates also sought to distinguish Portugal's economy from Ireland and Spain, both suffering the effects of a burst property bubble.
"We have had no banking crisis or property bubble. Our only problem was an excessive budget deficit due to the global crisis and we are correcting that," he said.