Portugal agrees 'good deal' on €78bn bailout
Wednesday 04 May 2011
Portugal has agreed a three-year, €78bn (£70bn) bailout from the EU and IMF, the country's caretaker prime minister, Jose Socrates, said.
Mr Socrates' government collapsed last month, sparking a sharp rise in borrowing costs which forced Lisbon to seek a bailout – the third eurozone country after Greece and Ireland to do so. The prime minister, who faces a parliamentary election on 5 June, hailed the package as a victory, saying it included more lenient terms than those imposed on Greece and Ireland as the deal gave Portugal more time to meet budget goals which it had previously agreed.
"The government has obtained a good deal. This is a deal that defends Portugal," he said, although he added: "There are no financial assistance programmes that are not demanding."
He said Portugal would now need to cut its budget deficit to 5.9 per cent of gross domestic product this year, compared with a previous goal of 4.6 per cent. The deficit will have to be cut to 4.5 per cent in 2012 and to 3 per cent in 2013. The deal is, however, yet to be put to the opposition parties. The opposition Social Democrat leader Pedro Passos Coelho said earlier he was ready to meet the lenders.
The reaction from the financial markets was cautious. Filipe Garcia, head of Informacao de Mercados Financeiros consultants in Porto, said: "He [Mr Socrates] showed us the bright side of the moon. It is the dark side that remains to be seen, and that includes the interest rate."
An EC source said what was presented was what had already been agreed. The source said the interest rate on the loan would be decided at a meeting of eurozone finance ministers in mid-May, when the bailout is expected to be approved.
Agreement is needed by 15 June, when Portugal has to meet a bond redemption of €4.9bn. A newly elected government after the June election will have to enact the terms of the bailout. Mr Socrates added, however, that the loan agreement would not require any changes to the constitution.
Lincoln MP Karl McCartney 'denied all knowledge' of the Twitter activity
Detective novelist who wrote Death comes to Pemberley passed away peacefully at her home, aged 94
Sites using the popular Gigya comment platform were attacked by the Syrian Electronic Army (SEA)
- 1 Sean Abbott: Messages of support flood in for bowler following death of batsman Phil Hughes
- 2 Ridley Scott on Exodus, Gods and Kings casting: 'I'm not going to get it financed if my lead actor is Mohammad so-and-so from such-and-such'
- 3 Girl, 7, gets Tesco to remove 'stupid' sign suggesting superheroes are 'for boys'
- 4 This letter from a reader explains why women can’t play football
- 5 'You should come to my house and eat cheeses with me': 4-year-old sends adorable love letter to girl at school
Black Friday 2014: Opening times for Asda, John Lewis, GAME, PC World and Argos
Miss Honduras Maria Jose Alvarado's stylist Luis Alfredo Garcia is found stabbed to death
Sean Abbott: Messages of support flood in for bowler following death of batsman Phil Hughes
Dr Lam Hoe Yeoh: Voyeur doctor jailed for eight years after using network of hidden cameras to film patients, colleagues and friends on the toilet
'You should come to my house and eat cheeses with me': 4-year-old sends adorable love letter to girl at school
Ukip says babies born to immigrants in the UK should be classed as migrants – which would include Nigel Farage’s own children
Rochester by-election: Ukip gains second MP as Tory defector Mark Reckless holds seat
'Beast of Bolsover' Dennis Skinner takes Ukip MP Mark Reckless to task moments after he is sworn in
The young are the new poor: Sharp increase in number of under-25s living in poverty, while over-65s are better off than ever
Tamir Rice: 12-year-old boy playing with fake gun dies after being shot by Ohio police
Exclusive: UK approved £7m Israeli arms sales in six months before Gaza conflict
iJobs Money & Business
£30000 - £250000 per annum: Recruitment Genius: A global Rolling Spot FX, Comm...
£Attractive Package: Citifocus Ltd: Chartered accountant (ACA or CPA), must be...
£6000 - £60000 per annum + Bonus and Benefits: Ampersand Consulting LLP: UI De...
£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...