Portugal has begun negotiating the terms of its bailout with representatives from the EU and the International Monetary Fund, An agreement is needed ahead of a general election set for June.
An international team has been examining Portugal's finances
Talks to negotiate the terms of Portugal's massive international bailout, expected to involve billions of euros, have begun between Portuguese officials and representatives from the European Union and International Monetary Fund (IMF), following efforts to reach a political consensus in Lisbon.
The aim of the negotiations is to agree on a set of tough austerity measures that the country will need to put into operation. Portugal is holding a general election on June 5, and agreement on the economic reform plan, from all of the country's political parties, is required by mid-May.
The country's caretaker Socialist government and the opposition last week held talks to thrash out a compromise "irrespective of the outcome of the elections," according to government spokesman Silva Pereira.
Acting Prime Minister Jose Socrates appealed for cross-party support on Sunday, but hit out at the opposition Social Democrats (PSD) - which lead the opinion polls - for triggering the elections. Socrates resigned last month after his latest austerity plans were rejected by opposition parties in parliament.
Socrates is stepping down as prime minister, forcing a general election
"I hope that those who scuppered a solution do not do it again, for Portugal's sake," he said, accusing the center-right PSD of waging "political guerrilla warfare out of greed for power."
European Commission President Jose Manuel Barroso, himself a former Portuguese prime minister, has said the proposed bailout package, estimated to be 80 billion euros ($116 billion) "will be a medium-term program with strict conditions."
On Tuesday, the international team visiting Portugal is due to hold talks with employers' groups and labor unions.
Repayments almost due
The need for funding is particularly urgent for Portugal, which must repay about 5 billion euros by June 15.
Officials from the European Commission, the European Central Bank and the IMF examined the state of public finances last week.
Portugal, which has a total debt of 159.5 billion euros, was supposed to reduce its borrowing to 7.3 percent of gross domestic product in 2010, but only managed to reduce it to 8.6 percent.
Socrates' government has already initiated spending cuts, tax increases and a series of unpopular economic reforms.
The EU and the IMF have both warned that more reforms, including a significant program of privatization, will be needed to secure Portugal's financial future.
Author: Richard Connor (AFP, Reuters)
Editor: Martin Kuebler