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Portugal hints at need for more help after bailout

Portugal’s president Anibal Cavaco Silva on Tuesday hinted that his debt-ridden country may need fresh financial support after 2014, the year its current rescue package ends.

On an official visit to Stockholm, Silva said he was “convinced that Portugal will not need another bailout”.

However, he added that under the terms of the 78 billion euro bailout ($105 billion), agreed in May 2011, Lisbon can receive further aid if necessary.

“It was decided a long time ago by the European Council that a country under intervention that complies with the programme that was negotiated will continue to receive support from the European institutions,” he said.

“It could be the case, as it has been say, for Ireland. And it could be the case for Portugal.”

He added that under European Union rules, a country in financial difficulties such as Portugal could “continue to have some kind of support if the country has difficulties to regain access to the markets”.

“But let’s wait and see. I’m not going to speculate.”

As part of the terms of the bailout, Portugal has imposed tax hikes and wage and pension cuts, aggravating a downturn that sent unemployment to a record 17.7 percent at the beginning of this year.

At local elections on Sunday, the ruling Social Democratic Party suffered a stinging defeat at the hands of the opposition Socialists as voters showed their frustration with the austerity programme.

Cavaco Silva has shown optimism over his country’s economic prospects, saying in an interview with the daily newspaper Dagens Nyheter that his country had “come out of the recession”.

“According to the latest indicators we have received it is possible the positive rate of growth will continue into the third quarter,” he said.