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Portugal welcomes EU move to extend debt payments

Portuguese Finance Minister Vitor Gaspar welcomed on Tuesday a decision by eurozone peers to extend in principle the payment deadline on funds owed by Portugal to a troika of international creditors.

Gaspar told Portuguese media in Brussels that “a very important aspect in our case is to favour conditions that open the way for our return to markets” for public debt.

Portugal is one of four eurozone countries to have received official aid, and is keen to regain full access to private markets.

In January, Portugal was able to borrow 2.5 billion euros ($3.25 billion) for five years on sovereign debt markets, making the critical move away from official financial assistance more quickly than expected.

The heavily-indebted country has depended since May 2010 on a 78-billion-euro bailout provided by the International Monetary Fund, European Central Bank and European Commission, the troika of international lenders.

On Tuesday, eurozone finance ministers asked the troika to come up with their “best offers” on extending the maturities on rescue loans made to Ireland and Portugal as part of efforts to help both return to private money markets for financing.

Gaspar told media that Lisbon should be able to pay back the troika’s emergency loans in less than 15 years, the period mooted by Irish Finance Minister Michael Noonan.

“Fifteen years is not a conceivable result at the end of the negotiation,” the Portuguese minister said, adding that he sought a “more modest” extension.

Meanwhile however, his government wants more time to bring its public deficit back below 3.0 percent of gross domestic product (GDP), the limit set for eurozone members and which Portugal was supposed to achieve next year.