by Calculated Risk on 5/05/2010 10:13:00 PM

Just a bit of an overview ... the European Central Bank (ECB) is meeting in Lisbon, Portugal, and will announce their interest rate decision at 4:45 AM ET. You can watch the news conference here live at 5:30 AM ET.

Great timing to meet in Lisbon since earlier today Moody's warned that Portugal may face a downgrade.

Ratings agency Moody's Investors Service on Wednesday placed Portugal's government bond ratings on review for possible downgrade, citing the recent deterioration of the country's public finances and "long-term growth challenges" to the economy.

In the event of a downgrade, the country's Aa2 ratings would fall by one or, at most, two notches, the agency said. Moody's said it expects to complete the review within three months.

Three months?

At the meeting, it is expected that the ECB will leave rates unchanged at 1%.

Professor Krugman argues Greece may end up leaving the euro: Greek End Game

Many commentators now believe that Greece will end up restructuring its debt — a euphemism for partial repudiation. I agree. But the reasoning seems to stop there, which is wrong. In effect, the consensus that Greece will end up defaulting is probably too optimistic. I’m growing increasingly convinced that Greece will end up leaving the euro, too.

And there was sad news from Greece, from Reuters: Europe leaders warn of contagion, 3 die in Greece