Portuguese firms warn on bank loans in debt rescue

20th April 2011, Comments 0 comments

Top EU and IMF officials working on a debt rescue for Portugal worth about 80 billion euros came under pressure from business leaders on Wednesday to ensure loans flow to firms.

The rescue team went into a third day of crucial talks just as Portugal made its first debt issuing since accepting the need for help.

Portugal managed to borrow one billion euros ($695 million) for three and six months but had to pay sharply increased interest rates, and on the bond market the rate on its 10-year debt rose above 9.0 percent for the first time.

Officials from the European Union, the European Central Bank and the International Monetary Fund arrived here at the beginning of the week to negotiate a deal to enable the country to avert defaulting on its debt.

"We are going to voice our concerns that bank terms for company financing will be guaranteed," said Joao Vieira Lopes, president of the employers' confederation of trade and services.

The meeting was one of a series the rescue team is holding with key sections of the Portuguese economy. On Tuesday they negotiated with the leading parties on the right of Portuguese politics. Left-wing parties have declined to partipate.

Lopes said then that any measures "must not focus solely on reducing the deficit because that would risk killing companies off."

© 2011 AFP

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