EU, IMF agree Portugal 11.5 bn euro 2nd tranche of debt aid

The EU, ECB and IMF ‘troika’ of Portugal’s creditors on Friday gave the green light for an 11.5 billion euro second tranche of debt aid as part of Portugal’s bailout plan.

“The programme is in our view on track,” said the troika in a statement.

“The approval of the conclusions of the current evaluation justifies the unblocking of the 11.5 billion euro ($16.4 billion) tranche.”

“The government underscored that it wants to anticipate key reforms,” it said but also warned, “Most difficult challenges are still ahead”.

The troika said it was “confident the deficit goal for this year will be met” and added: “Our overall assessment is very positive”.

The latest tranche will probably be paid next month, after final agreement by eurozone finance ministers and the IMF board.

Portuguese Finance Minister Vitor Gaspar said earlier Friday creditors from the European Union, European Central Bank and the International Monetary Fund were satisfied with Portugal’s implementation of its debt bailout plan agreed in May.

“It is with satisfaction that I note the positive evaluation of the mission,” Gaspar said in a statement read to the press.

“The mission highlighted the government’s determination to implement the programme adopted in May,” he said.

Portugal has already received 19.8 billion euros of a three-year 78-billion-euro bailout earlier this year and agreed in return to stringent budget measures to scale back state spending.

The centre-right government has pledged to cut the deficit to 5.9 percent this year from 9.1 percent in 2010, and to three percent in 2013.