EU expects Portugal will need $114b in aid

April 09, 2011|Associated Press

GODOLLO, Hungary — Europe’s top financial officials said yesterday that Portugal will need around $114 billion in rescue loans, but a tense election campaign in the debt-ridden country is set to complicate reaching a deal with opposing political parties.

A full-fledged adjustment program should be in place by mid-May, allowing the debt-ridden country to meet huge bond repayments in June, the EU’s monetary affairs commissioner, Olli Rehn, said.

Rehn said that the program would have to be agreed on by all major political parties, to ensure that it will be implemented after elections in early June, which will likely heave the opposition into power.

International Monetary Fund director Dominique Strauss-Kahn said yesterday that the IMF had received a request for financial assistance from the Portuguese authorities, and was prepared to move “expeditiously’’ and hold “swift discussions’’ with the government.

However, Portugal’s acting finance minister, Fernando Teixeira dos Santos, quickly thwarted hopes of cooperation between the opposing political forces, saying the caretaker government will not talk directly to the opposition and that any talks would have to be led by the European authorities and the IMF instead.

Portugal this week became the third country in the eurozone to request international help, after last year’s multibillion rescue packages for Greece and Ireland.

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