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Bye bye bailout: Portugal exits without credit line

Bye bye bailout: Portugal exits without credit line
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Portugal has announced that it will be exiting its 78-billion-euro bailout programme. Lisbon was forced to seek the bailout from the European Union (EU) and International Monetary Fun (IMF) in 2011.

After three years of painful austerity and unpopular reforms, the exit is widely seen as a major success for the current Portuguese government. Furthermore, Lisbon plans to leave its bailout without a precautionary credit line.

Portuguese Prime Minister Pedro Passos Coelho told a news conference: “We have financial reserves for one year that protect us from any external agitation. We have the trust of investors and the rates of our debt are at a historically low level.”

During the height of its debt crisis, many economists thought Lisbon would be forced to default. Instead, Portugal will follow Ireland, which, in December, became the first eurozone country to exit its bailout without a credit line.

Socialist party leader António José Seguro criticised the government, saying: “In the same week that government announces that they don’t want help to return to the market, the Portuguese people were informed that VAT will rise, that all workers will pay more taxes, that the cuts in pensions are forever and that there will be more job cuts in the public sector.”