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New Portuguese self-confidence

October 4, 2013

The Portuguese prime minister has told lawmakers his country will be able to stay afloat without another bailout by international creditors. The latter have only just approved the current austerity program.

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Portugal's Prime Minister Pedro Passos Coelho REUTERS/Tobias Schwarz
Image: Reuters

Portuguese Prime Minister Pedro Passos Coelho told legislators in Lisbon on Friday his country would be able to avoid a second international rescue package despite massive problems consolidating public finances.

"A second rescue plan isn't necessary," Coelho said. "Having recourse to a second bailout would be too great a risk for the country."

Just a day after creditors from the EU and the International Monetary Fund (IMF) approved the implementation of the current austerity scheme, the prime minister insisted that nearly everything was in place to head off any additional rescue funds.

Optimism prevails

Portugal received a 78-billion-euro ($106-billion) bailout in May 2011, paid out in tranches until June 2014. In exchange for the funds, Lisbon imposed tax increases and wage cuts to decrease spending.

Portugal Hopes for More Exports

While Portugal managed to cut public deficit to 7.1 percent of GDP in the first half of 2013, it's still facing an uphill battle to meet its target of 5.5 percent this year and 4 percent in 2014.

The southern European eurozone nation exited a two-year recession in the second quarter, logging 1.1-percent growth.

"The data available lead us to believe that the third quarter will also be positive," Coelho argued. "We now know that our economy can reverse its decline."

hg/tj (dpa, AFP)