Portugal will receive its last tranche of aid funds form the eurozone in June, the bloc’s rescue fund EFSF said Thursday, as the debt-hit country gets ready to emerge from a multi-billion euro bailout programme.
The final disbursement of bailout money amounting to 1.2 billion euros ($1.7 billion) was approved on Thursday by the eurozone.
“As we approve the final EFSF disbursement to Portugal, I am very pleased to see the country’s achievements under the financial assistance programme,” said Klaus Regling, who heads the European Financial Stability Facility (EFSF).
“Three years ago Portugal had lost market access. After a painful but necessary economic adjustment the country is now starting to see benefits as imbalances are being corrected and credibility has been regained,” he added.
Portugal had obtained a rescue package worth 78 billion euros three years ago to avert default, after decades of ballooning wages and state spending led to a massive build-up of public debt.
It is due to exit the bailout package on May 17 after having doggedly carried out reforms including sweeping job, pay and pension cuts required by its creditors.
On Wednesday, it breezed through a key bond market test, enjoying sharply lower borrowing costs compared to the height of the crisis.
“The upcoming end of the programme is not the end of the reform process. Many challenges remain,” said Regling, adding however that Portugal is now “in a good position” to tackle them.