Expatica news

Portugal passes fourth EU-IMF bailout review: minister

Portugal has passed its fourth bailout review and will receive its next tranche of rescue loans from the European Union and International Monetary Fund, Finance Minister Vitor Gaspar said on Monday.

“According to the evaluation made by international institutions, we are respecting our recovery programme,” Gaspar said.

“We met our quantitative objectives,” the minister said noting a rapid reduction in its external imbalances despite a global economy showing clear signs of slowing down.

“Our budget roll-out remains in line with our 2012 targets and the government should be able to bring the deficit down to 4.5 percent of GDP (gross domestic product) as planned,” he said.

Last year, Portugal became the third eurozone country after Greece and Ireland to be bailed out, receiving an EU-IMF package worth up to 78 billion euros ($96.7 billion) in return for a commitment to reform its economy and impose austerity measures.

European Union and International Monetary Fund auditors had said in April that Portugal was meeting debt-rescue targets and could be strong enough to borrow on financial markets next year though the country was in a deeper recession than previously thought.

Portugal also announced Monday that it will inject more than 6.65 billion euros into private banks BCP and BPI, and the state-owned CGD to meet criteria established by the European Banking Authority.

The injection will use funds provided by the international rescue, except for one billion euros to CGD, which as a state-owned institution cannot receive funds directly from the EU-IMF package.