4/8/11

Master of News

Portugal spurts the Knute

The over-indebted Portugal fled just under the rescue. But now is getting the country to feel the downside of support: more and more EU leaders call for stricter conservation measures.
In exchange for emergency loans must be applied for Euro-Portugal to expand its savings program significantly. "The package needs to be tougher. There must also be structural reforms, fiscal consolidation alone is not enough, "said the Finnish Finance Minister Jyrki Katainen on Friday at an EU meeting in Gödöllö department chief in Budapest.

Also, a Commission spokesman stressed that the withdrawing Portuguese Prime Minister José Sócrates measures presented are only "a starting point," and there are more sweeping reforms.

Luxembourg's finance minister and head of Euro Group, Jean-Claude Juncker said, however, the "political problem": "Who can we negotiate the terms? I hope we get more clarity now. "Elections are the first in Lisbon on 5 June planned. But he was confident that the major parties from government and opposition would confess to the austerity plan, said Juncker.

Call for help
Socrates had made late Thursday evening in Brussels with the formal request for emergency loans from the euro bailout fund. Since Parliament had rejected Lisbon in his rehabilitation program, which he wanted to win back the confidence of financial markets, the prime minister had resigned in March. The interest of Portuguese government bonds were then further fired up and even local banks would not buy more government bonds - that finally forced the government to handle the euro-dropper.

In Gödöllö now began the negotiations for the Portugal-rescue. It could be already "initiated a" put, "said Finance Minister Wolfgang Schäuble (CDU). The rules would provide that the International Monetary Fund (IMF) to one-third participate in the rescue. "The funds from rich by far," assured the minister.

Financial needs to be confirmed
How much money Lisbon needs to be determined in the coming days, experts from the EU Commission, the European Central Bank (ECB) and the IMF. In parallel, negotiations on the necessary measures to back the Portuguese economy in good shape and the government deficit next year will be reduced to 4.6 percent.

As the volume of the aid package are 75-85 billion euros in the room. However, it was premature to talk about specific figures, said the reigning Portuguese Finance Minister Fernando Teixeira Dos Santos Gödöllö. The duration of the program must be negotiated. A peace agreement was not expected on Friday.
The temporary rescue (EFSF) can provide a total of 440 billion euros. So far, only Ireland EFSF loans receive 17.7 billion euros. For Greece there is a separate program outside of the Fund. The Euro-zone hopes that Portugal is the last country to be rescued by emergency loans from the payment of default. For Spain there is no danger, said EU Commissioner Olli Rehn. The country will overcome the challenges through bold austerity measures and reforms without help. It also notes that public debt in Spain under the EU average.