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Lenders consider seven year extension for Portugal loan repayments

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Lenders consider seven year extension for Portugal loan repayments


International lenders have recommended that Portugal should get an extra seven years to repay loans to the European Union.

The move would offer a significant boost to Lisbon as it tries to push through a series of difficult spending cuts.

The extension is also being considered for Ireland which got an emergency loan in 2010 a year before Portugal.

By extending the maturity the payments are spread over a longer time, reducing the burden on the economies.

EU ministers are set to meet in Dublin on April 12 and 13 to discuss the extensions, with a formal decision expected next month.

While it is thought that Ireland will get full support, backing for Portugal is expected to be conditional on the country plugging a 1.3 billion euro gap in its 2013 budget, which arose after the constitutional court rejected four of Prime Minister Pedro Passos Coelho’s planned austerity measures.

He will now have to make alternative cuts to the health, education and welfare budgets to keep the Troika on side.

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