<p>1.- The government imposed an austerity program and, in exchange, received assistance from the IMF and the EU.</p>

<p>2.- The ECB made it clear that it would do whatever as necessary to save the Euro, even buying sovereign bonds of Euro countries.</p>

<p>3.- A general improvement in financial conditions around 2013 throughout the world let to a decline in default premia.</p>

CC BY-SA 3.0
2016-06-01T14:44:10.487Z
2016-06-01T14:56:45.603Z
2016-06-01T14:56:45.603Z
Fix.B.
<p>Quite simple, though a very bad solution. The ECB creates money out of nothing and uses it to buy government bonds... So by printing money they create 'artificial demand', no one in their right minds would buy Portugal's debt, they will never be able to repay it, their economy (and most of Europe's economies) are dead in the water. When you can print money all you want you have no risk, so you can buy whatever you want... that's why the risk-premia (interest rates) on Portugals debt went down...</p>

CC BY-SA 3.0
2016-06-02T21:03:25.200Z
2016-06-02T21:03:25.200Z
tibo
<p>I notice that Portugal had a very high interest rate on its national bond issues back in 2012 but since then it has drawn down significantly:</p>

<p><a href="https://i.sstatic.net/9sj62.png" rel="noreferrer"><img src="https://i.sstatic.net/9sj62.png" alt="enter image description here"></a></p>

<p>How were they able to decrease the interest rate?</p>

CC BY-SA 3.0
2016-04-13T16:56:47.743Z
http://www.dw.com/en/portugals-economy-post-bailout/a-18452988
123
<government-debt><bonds><portugal>
How did Portugal draw down their interest rates on pubic debt?
Lassie Fair
# How did Portugal draw down their interest rates on pubic debt?

(Asked by: username_0 on 2016-04-12)

I notice that Portugal had a very high interest rate on its national bond issues back in 2012 but since then it has drawn down significantly:

[![enter image description here](https://i.sstatic.net/9sj62.png)](https://i.sstatic.net/9sj62.png)

How were they able to decrease the interest rate?

**Tags:** government-debt, bonds, portugal

> **Comments:**
> **username_1**: http://www.dw.com/en/portugals-economy-post-bailout/a-18452988  

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## 2 answers

### Answer by username_2 on 2016-06-01. Score: 6

1.- The government imposed an austerity program and, in exchange, received assistance from the IMF and the EU.

2.- The ECB made it clear that it would do whatever as necessary to save the Euro, even buying sovereign bonds of Euro countries.

3.- A general improvement in financial conditions around 2013 throughout the world let to a decline in default premia.


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### Answer by username_3 on 2016-06-02. Score: -3

Quite simple, though a very bad solution. The ECB creates money out of nothing and uses it to buy government bonds... So by printing money they create 'artificial demand', no one in their right minds would buy Portugal's debt, they will never be able to repay it, their economy (and most of Europe's economies) are dead in the water. When you can print money all you want you have no risk, so you can buy whatever you want... that's why the risk-premia (interest rates) on Portugals debt went down...


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