SINCE the start of the euro crisis, a hope has been that a way could be found to support governments that were temporarily short of cash (because of skittish bond investors) but that had public finances that were otherwise sound. The €489 billion ($643 billion) of cheap cash that the European Central Bank lent in December to banks for three years may prove such a scheme. With the promise of more long-term ECB loans to come, borrowing costs for euro-zone governments have fallen sharply, in part because banks have put some of the money to work by buying high-yielding bonds (see article).

It is damning, in such propitious circumstances, that Portugal has not shared in the rush. Even as yields in other trouble spots, such as Ireland, Italy and Spain, have plunged since the start of the year, Portugal's have risen. In part this is because its bonds were downgraded to junk status on January 13th by Standard & Poor's, a ratings agency, forcing funds that can only hold investment-grade bonds to sell. The surge in yields on two-year Portuguese bonds is a sign that bondholders fear they will have to accept the kind of losses that Greece is still negotiating with its private-sector investors. When bond prices fall in anticipation of uniform losses, the implied yields on short-dated bonds rise by more than those of longer-dated ones.