Brian Tora of J M Finn

THE news that the Greek government had passed the legislation needed to usher in another round of austerity was sufficient to push markets higher yesterday.

All around Europe, shares gained as a disorderly default was pushed further into the background. So far so good, but we are far from being totally out of the woods.

As it happens I visited Portugal last week. Also in thrall to the moneylenders of the European Central Bank and the International Monetary Fund, they are different to Greece mainly in the way they appear more resigned to their fate.

While citizens are not out on the street setting fire to vehicles, it was nevertheless a depressing experience looking at closed business premises and discovering how expensive hitherto cheap items had become, thanks to a hike in their sales tax.

But cheer is also appearing on the corporate front. Not only are the first results for the year just ended living up to expectations, but deals appear back on the agenda.

Vodafone’s announcement that it was casting an eye over Cable & Wireless reminded investors that companies with strong balance sheets could well use the current difficult business environment to mop up less well placed rivals. Shares have now risen by over 15% since the beginning of the year.

The FTSE 100 index is within sight of 6000 again, though this recent positive trend could so easily be overturned by bad news from within the embattled Eurozone.

Still, markets do seem to be taking a more optimistic view of events, perhaps because they understand that it is in everyone’s interests to achieve a successful outcome that avoids the single European currency falling apart.