Post date: May 04, 2011 2:8:25 PM
Portugal has reached a deal with the EU and the IMF on a 78 billion euro 3-year bailout, and caretaker Prime Minister Socrates says the terms are less onerous than thsoe set for Greece and Ireland.
PORTUGAL-BAILOUT - Portuguese wake up to details of their country's bailout from the European Union and the International Monetary Fund.
The country will receive 78 billion euros of financial aid over three years - becoming the third euro zone
member to get a rescue package.Caretaker Prime Minister Jose Socrates, who resigned in March after the opposition rejected his government's austerity measures, says the agreement terms give Portugal more time than expected to meet its budget deficit targets.
And he says Lisbon has less onerous bailout terms than Greece or Ireland.
Jose Socrates, Portugal's Caretake Prime Minister, saying):
"The government has obtained a good deal. This is a deal that defends Portugal. Naturally, there are no financial assistance programs without demands that do not require substantial work. They do not exist."
Lisbon residents are worrying about the lack of detail about the terms - and what spending cuts and tax rises are in store.
Ricardo Veiga, Lisbon resident, saying:
"He didn't explain what we have to pay. He just spoke about the positive things, and did not say anything about what we the situation we be in terms of more taxes we will have to pay, so I don't think he said anything."
Margarida, Lisbon resident, saying:
"I think the Prime Minister only said what suited him, the best things. He said the IMF will speak within days, certainly to say the worst things."
The bailout terms will have to be approved - and implemented - by the winner of Portugal's snap election on June 5th.
But Portugal and the EU hope it will help calm the markets - which have pushed Portugal's borrowing costs to record highs.
Portugal sold over 1 billion euros during its first debt sale since the rescue package was agreed.
But many analysts are concerned, saying the Greek bailout didn't really work and might have to be restructured.
Angus Campbell from London Capital Group.
Angus Campbell, Head of Sales, London Capital Group, saying:
"To be able to fund and repay within three years the bailout is a very tall order. So for Greece, things are quite difficult of course, they're looking for a further extension, they've already seen their extension from four years to seven years, it looks like it could go out even further and it adds pressure to the bailout situation as a whole."
Lisbon may be pleased with its bailout terms but it's clear receiving aid is only the beginning - and some officials believe the terms of the package could send Portugal into a deep recession lasting two years.
Joanna Partridge, Reuters