Home News Portugal does not seek Greek-style debt deal: PM

Portugal does not seek Greek-style debt deal: PM

Published on 04/12/2012

Portugal will not seek changes to obtain lower interest rates on its bailout loans as Greece received and is respecting targets laid down by creditors, Prime Minister Pedro Passos Coelho said on Tuesday.

“Portugal is not asking for treatment identical to that for Greece,” he said in remarks on a visit to Cape Verde and reported in Portuguese media.

When the deal with Greece was reached, Portuguese Finance Minister Vitor Gaspar said that Portugal, like Ireland, might be able to benefit “from conditions under the European Stability Mechanism (rescue fund) in line with the principle of equality of treatment adopted at the eurozone summit in July 2011.”

However, Gaspar who attended a meeting of eurozone finance ministers in Brussels on Monday, was also reported by Portuguese media as saying that “Portugal is not Greece” which was in a “unique” situation.

Last week, the eurozone, the International Monetary Fund and the European Central Bank agreed on ways of reducing the long-term debt owed by Greece as part of a deal enabling them to release the latest instalment of agreed bailout funds to Greece in return for further budget measures.

One of the measures agreed was lowering the interest rate charged to Greece on its bailout loans.

The latest loan instalment, to be paid in four slices from the middle of December to March and needed to avert default by Greece by the end of the year, is dependent however on the success of a debt buyback which Greece has just launched.

Passos Coelho noted that “Greece had been through some very difficult times for more than five months of negotiations which led up to the release of financial support. I do not want Portugal to have to go through the same type of negotiation.”

Portugal, which obtained a 78 billion euro ($102 billion) bailout from the European Union and IMF in May of 2011, is applying radical measures to raise taxes, cut spending and reform its economy so as to regain confidence on financial markets and to fund itself normally on the sovereign debt market next year.

“Our return to the markets and the normalisation of financing for Portuguese businesses is being built up gradually and it is a matter of pride and hope for the Portuguese people,” he said.

In the middle of November, an audit by the IMF, EU and European Central Bank found that Portugal was making satisfactory progress towards the targets laid down as conditions for the bailout loans, clearing the way for the release of the next instalment of 2.5 billion euros of the total bailout package of 78.0 billion euros ($102 billion).

“We don’t want treatment and a solution the same as the one for Greece because our situation is not the same,” Passos Coelho said.