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Portugal's bailout lenders review 2015 budget and reforms


Portugal's bailout lenders review 2015 budget and reforms


Inspectors from the so-called troika – the International Monetary Fund, the European Union and the European Central Bank – are back in Portugal for their second visit this year.

The one-week-long mission to the bailed out country will focus on the government’s budget for next year and structural reforms.

Brussels is concerned the draft budget includes no additional austerity measures to replace those blocked by the Portugal’s Constitutional Court.

It also relies on what some see as an overly optimistic economic growth forecast – 1.5 percent for next year, compared with the OECD’s prediction of 1.3 percent.

The 2015 spending plan include a forecast budget deficit of 2.7 percent of GDP, above the 2.5 percent target the Lisbon government has agreed with its creditors.

Troika officials are also checking Portugal’s fragile financial sector, three months after the rescue of Banco Espirito Santo and as Banco Comercial Portugues failed ECB stress tests.

Another topic of discussion will be Lisbon’s desire to follow the example of Ireland, with an earlier than planned payback of its bailout loans from the International Monetary Fund to reduce the amount of interest it has to pay on that debt.

Portugal received an international bailout of 78 billion euros in 2011 to avoid bankruptcy.

with AFP

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