EU-IMF group clears Portugal bailout payment
Portugal should get an €8 billion instalment from its bailout package, despite slippages in its budget deficit for 2011, experts from a group of international lenders concluded on 16 November.
Due to reckless spending, mainly in the region of Madeira, Portugal's 2011 deficit would overshoot targets by 1.5 percentage points, a troika of experts from the European Union, the European Central Bank (ECB) and the International Monetary Fund (IMF) said after a mission in Lisbon. However, given the government's plans to make up for the loss by getting banks to inject assets into social security funds, the EU-ECB-IMF team predicted that the country would still respect the 5.9% of gross domestic product (GDP) deficit target.
In a statement, international lenders also praised the fresh austerity measures in the draft budget for next year, estimating that it would allow Portugal to meet the "ambitious fiscal target of 4.5% of GDP in 2012."
If Eurozone finance ministers and the IMF executive board were to approve these findings, Portugal would be in line to receive its bailout instalment "in December and January," the EU-ECB-IMF team said. The funds are part of the €78bn, three-year loan that Portugal secured last year, becoming the third Eurozone member after Greece and Ireland to resort to a bailout.