Wracked by political upheaval and faced with unsustainable borrowing costs, Portugal-after months of trying to stave off a debt crisis-turned to the European Commission for help, becoming the third eurozone member to request debt assistance. The bailout request came following the resignation of Prime Minister Jose Socrates, who stepped down after the Portuguese parliament rejected an austerity budget as too severe.
Austerity is likely to come anyway. Although details of the bailout package are still being worked out, the plan is expected to require Portugal to institute significant budget cuts in return for between $116 billion and $130 billion in lower-interest loans and other assistance. If that figure holds, the bailout would be about the same size as Ireland's November 2010 rescue package ($123 billion), but smaller than the one Greece received ($159 billion) a year ago.
Portugal has one of the 17-nation eurozone's smallest and weakest economies, with economic growth averaging only 1 percent a year over the past decade. Over the same period, the nation amassed huge debts. Portugal's public debt is expected to equal roughly its total economic output this year, up sharply from being at 60 percent of GDP five years ago. On June 15 a $7 billion debt payment is due, 10 days after elections for a new government.
'A pattern of misconduct'
U.S. banking regulators ordered 14 of the nation's largest mortgage lenders and servicers to overhaul their foreclosure practices, hire outside consultants to review complaints and, if necessary, make restitution to homeowners whom they may have foreclosed on improperly.
The consent orders-issued by the Federal Reserve, the Office of Thrift Supervision, and the Office of the Comptroller of the Currency-stemmed from investigations into the banking firms' use of "robo-signers" to rubber-stamp foreclosure-related legal documents without verifying the facts of each case. According to a Federal Reserve statement, the enforcement actions are designed to address "a pattern of misconduct and negligence" that led to "unsafe and unsound practices."
The nation's four largest banks-Bank of America, Citibank, JPMorgan Chase and Wells Fargo-are among the 14 lenders and servicers cited.
As the April 18 tax-filing deadline approached (three days later than usual), the IRS reported that this year's average federal income-tax refund (as of April 8) was $2,895. That means that by estimating withholding more accurately (i.e., much closer to actual tax liability), the average taxpayer would have enjoyed an increase in take-home pay of more than $200 per month in 2010.