Portuguese rescue talks nearly complete: EU official

Rescue talks for debt-laden Portugal may conclude shortly, a European Commission spokesman Amadeu Altafaj said on Tuesday, amid reports a bailout plan might be announced on Wednesday.

Local media have speculated that the plan will include a shake-up of labour laws that will facilitate redundancies, shorten the length and the amount of unemployment benefits, as well as boost banks’ capital.

“We hope to have a conclusion in the immediate future…(and) reach a satisfactory agreement as quickly as possible,” Altafaj told Portuguese media, in response to reports the talks may close as early as Wednesday.

That will insure that the plan “currently in discussion would effectively be put in place” after Portugal’s June 5 legislative elections, the spokesman for EU economic and monetary affairs added, as cited by the Publico daily.

Officials from the “troika” of the European Central Bank, European Union and International Monetary Fund are currently in Lisbon negotiating the terms of a financial rescue package expected to total nearly 80 billion euros ($118 billion).

Portugal was forced to ask for a bailout in March after Prime Minister Jose Socrates’ government resigned following a parliamentary dispute and rejection of a fourth round of austerity measures.

Investors have been steadily asking for higher rates of return to lend money to Portugal, which has to roll over billions in maturing debt this year and has a high budget deficit.

Lisbon has to have the bailout package in place by June 15 when it has to repay nearly 5.0 billion euros ($7.3 billion) in maturing debt.