Reuters: What Greece’s latest debt deal might mean for Ireland and Portugal

Another week, another Greek debt deal. Third time’s a charm, EU and Greek politician αssure us. Under the agreement, Greece’s international lenders agreed to reduce Greece’s debt load by 40 billion euros, cutting it to 124 percent of gross domestic product by 2020 through a package

Marc Chandler, head of currency strategy at Brown Brothers Harriman, points out “an under-appreciated twist to the plot”: the Greek deal has potential implications for other bailed out European states like Portugal and Ireland.

European officials adopted a principle of equal treatment under the framework of the EFSF. Essentially, this means that consideration given out to Greece applied to the other countries who receive EFSF assistance, namely Ireland and Portugal.

Ireland and Portugal are consistently evaluated positively by the Troika, but are now required to have a more onerous debt servicing burden – higher interest rates and shorter maturities – than Greece. Some market participants see the likelihood that the official sector restructures Ireland and Portuguese debt.