Portugal votes against austerity

The government of Portugal has voted against an austerity bill, according to an article titled “Portugal debt vote likely to rattle markets” by The Globe & Mail.

According to the article Portugal’s debt as a percentage of GDP is 85%, and its deficit as a percentage of GDP is 9.3%. According to the formula I created in my post Greece vows to reduce deficit, Portugal’s “future going burden” is 4.73, well below the UK (5.75), Greece (5.81), and Spain (5.12).

Although Portugal’s forward going burden is not high, countries in the EU are being categorized as higher risk because of the potential of a default by Greece. By being so-categorized, Portugal’s risk of a run is higher (thus so is the likelihood of insolvency).