Portugal moves forward on asset sales

LONDON (ShareCast) - While market attention focuses on Greece - with hopes that an agreement with its private creditors will be reached by the end of the week - other peripheral euro area countries remain in the spotlight. Portugal is preparing for the second round of asset sales in its attempt to comply with the requisites on in its own €78bn bailout package that was received last year from the International Monetary Fund (IMF (Berlin: MXG1.BE - news) ) and the European Union (EU). Its (Euronext: ALITS.NX - news) government is looking to sell up to a 40% stake of the national power grid and gas pipeline operator Redes Energéticas Nacionais (REN (Frankfurt: A0MVJA - news) ), as well as a 7% stake in the oil company Galp. Portuguese Primer Minister Pedro Passos Coelho pointed out last night that his government is close to choosing a buyer for REN and hopes to "very quickly reach a positive result concerning Galp. "That means that conditions will be set to begin the second wave of privatizations scheduled for this year," he commented. In this sense, Portugal is working hard to implement its fiscal promises and reduce its deficit according to the bailout agreed with the IMF and the EU. Fears over a meltdown in Greece taint the country's sovereign bonds but Passos Coelho assured reporters that there is no risk of a writedowns on Portuguese debt. The Primer Minister repeated that it is his intention to return to public debt markets in 2013. "The Portuguese economy deserves to be defended from the contagion effect that started outside the country. Most important is the removal of financial stress," he said. JM