Portugal EU aid bid 'sensible', 'necessary': Berlin

It's the end of the line for Greek Prime Minister George Papandreou.In a cabinet revolt led by his finance minister, Papandreou was ordered to "leave calmly in order to save his party". He obliged, having no real choice in the matter because otherwise he would have been ousted in a vote of confidence.He may survive the vote, but it will do him no good as part of the agreement.Please consider Greek PM ready to go, dump referendum, for euro deal

George Orlwell coined the term doublethink in his classic book 1984. Doublethink is the power of holding two contradictory beliefs in one's mind simultaneously, and accepting both of them. Have you listened to the conflicted beliefs coming from Spain lately? Conflicted Beliefs

FROM Newsbook:European Union leaders have breathed a sigh of relief. Olli Rehn, the EU’s top economic official, said it was a “responsible step for securing the financial stability of the euro zone”. José Manuel Barroso, a former Portuguese prime minister who is now president of the European Commission, said the request would be “processed in the swiftest possible manner”.

Portugal, which is entering the last year of a three-year European Union aid program, will likely need further help from Europe at a time when core countries in the region, such as Germany, are fast losing enthusiasm about providing financing to ailing peripheral nations.   The most likely solution to this problem, according to analysts at Credit Suisse, isn’t a second bail-out but instead that European institutions offer Portugal a credit line until the country can make a full return to debt markets.  

Today the European Commission released its long awaited forecast on eurozone’s financial future, reported Financial Times. Yet the news are not so positive, since expectations on France’s and Germany’s growth are almost flat. According to the report in 2013 France’s economy will increase by 0.1% and Germany’s by 0.5%, which is a downgrade by 30 basis points, compared to a quarter ago. The total eurozone’s economy will contract by 0.3%. In November the Commission had more optimistic prediction of growth of 0.1%.

A small dose of reality has set in for a group of European central bankers: Euro Officials Begin to Weigh Greek Exit as Euro Weakens. Greece’s possible exit from the euro moved to the center of Europe’s financial-crisis debate, rattling markets as authorities in Athens struggled to form a government.

Euro-zone finance ministers are set to adopt an aid package for Portugal next week and review Greece's worsening fiscal situation, German Deputy Finance Minister Jörg Asmussen said.

Once again the stock market is cheering something that is supposed to happen in the future, much like the monstrous month long EFSF bailout rally, with terms sill not set. Remarkably, three billion euros of EFSF bonds have been sold on unknown terms.