Financiële markten kalmeren na succesvolle uitgifte obligaties door Portugal (en)
Portugal is issuing a sigh of relief after a make-or-break bond issue on Wednesday met with relative success.
Lisbon managed to sell €1.25 billion worth of four-year bonds at yields of 5.39 percent and 10-year bonds at 6.71 percent, down from higher rates seen in recent days.
Crucially, rates did not breach the psychologically important seven-percent mark, the rate at which analysts had expected would precipitate a decision by the government to call on EU-IMF financial assistance, following in the footsteps of fellow heavily-indebted eurozone states Greece and Ireland.
However, the country only won itself breathing room as the rates remained high and at levels unsustainable in the long run.
On Tuesday, the Portuguese central bank announced that it expected the country's economy to contract by 1.3 percent this year.
It is unknown whether Portuguese Prime Minister Jose Socrates i punched the air after the auction, but he did cheer the result, calling it "a success from any angle".
"We don't need that help," he said of the EU-IMF financial support. "We only need confidence, the confidence that markets have shown today."
Finance minister Fernando Teixeira dos Santos said: "The success of today's issue shows that Portugal has the necessary conditions to finance itself in the market at prices that are not only acceptable, but favourable in the current climate."
And the head of the Bank of Portugal, Carlos Costa, described the result as a "signal of greater confidence from markets in the ongoing adjustment program of the Portuguese economy."
The German government congratulated their Iberian colleagues, with Chancellor Angela Merkel noting that the sale "went quite well".
Meanwhile Spain puts government debt up for sale for the first time in 2011 on Thursday. Madrid hopes to auction up to €3 billion in five-year bonds.
Similar five-year bond yields were on 4.813 percent on Wednesday, up from 3.576 percent at the last such government offering in November.