Portugal bail-out: High-level talks to set terms

Top IMF, European Commission and European Central Bank officials are to begin talks shortly with Portugal to set the terms of its proposed bail-out.

Finance Minister Fernando Teixeira dos Santos leads Portugal's team

They are to meet Portuguese Finance Minister Fernando Teixeira dos Santos in the capital Lisbon after a fact-finding mission last week.
The 80bn euro ($115bn; £70bn) bail-out is due to be completed by mid-May.
Portugal's people are braced for more austerity as the price of the deal, a BBC correspondent reports.
Some economists see the IMF taking a softer line on the interest rate and duration of the loan than EU officials, who are under pressure from voters in member states that are putting up the money, the BBC's Alison Roberts reports from Lisbon.
Just last week, the IMF forecast that Portugal's GDP would shrink this year and next.
While the main opposition party is backing the caretaker government's bail-out bid, many Portuguese are vocal in their opposition, our correspondent says.
German negotiators Two Germans are leading the EU delegations - Juergen Kroeger for the European Commission and Rasmus Rueffer for the European Central Bank - while the IMF team is led by a Dane, Poul Thomsen.
Support for the bail-out from Germany, the richest eurozone state, is crucial.
EU finance ministers have identified three main areas for austerity measures in the country - fiscal adjustment, competitiveness and financial sector solvency.
They have also called for an ambitious privatisation plan.
Portugal's problems have been different from those of Greece and the Irish Republic, the other eurozone countries that have needed bailing out.
Weak economic growth and low productivity have meant that the country has struggled to raise enough money through taxation to pay for government spending.
When the banking crisis came, Portugal found itself dealing with the same rising costs of debt that other countries had to deal with, and finally had to concede that it could not raise the money it needed through financial markets.
The Republic of Ireland, on the other hand, had a much more severe banking crisis, largely as a result of a property bubble that burst.
Greece went on a debt-fuelled spending spree while failing to sort out the public finances to fund it.

BBC

Posted in: Politics