Greece reaches bailout deal, Portugal offers new austerity

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Greece reaches bailout deal, Portugal offers new austerity

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Greece has been given a clean bill of health by the “troika” of creditors – the European Commission, International Monetary Fund and European Central Bank – which means it will get its next chunk of rescue aid soon.

That comes after Athens ended opposition to 15,000 public sector job cuts – a key condition of the latest bailout deal agreed late last year.

Greek Prime Minister Antonis Samaras said: “While insecurity and anxiety are gripping the world, Greece is being stabilised and our position is being bolstered. We have reached an agreement for the disbursement of the next instalment of 2.8 billion euros, and the way is now open for the May instalment of six billion.”

The troika members said Greece is on course to contain its debt and pull itself out of a crippling recession next year.

Athens has been promised further help – such as lower interest payments on the money it is being loaned – if it keeps meeting its bailout targets.

Meanwhile in Lisbon, more troika auditors are checking out Portugal’s new austerity measures.

Additional spending cuts were forced on the government by the country’s constitutional court ruling that reducing pensions and state workers’ wages was unconstitutional.

Half of the 1.3 billion euros shortfall will come from cuts in ministries’ operating budgets and the rest from lower health, education and social security spending.

The trokia has to agree that is viable for Portugal to get the next two billion euro instalment of bailout loans and a seven year extension of the time to pay them back.