Portugal secures bailout deal for €78bn from IMF and EU

PORTUGAL last night struck a deal for an international bailout worth €78bn (£70bn) to ease its debt burden for a three-year period.

The country’s caretaker prime minister Jose Socrates said he had “got a good deal” in a televised address.

Few details of the loan were given last night, after almost a month of wrangling with the European Central Bank, the European Commission and the International Monetary Fund (IMF).

The interest rate Portugal pays on the loan is due to be set by EU ministers on 16 May. Socrates said Portugal would be given more time to reach its budget deficit targets than had been previously expected.

Lisbon will now seek to cut its deficit to 5.9 per cent of GDP this year. It had aimed to reduce its debt mountain to 4.6 per cent of GDP. Portugal’s main opposition parties have to endorse the deal ahead of a general election on 5 June, although are expected to agree to the terms of the rescue package.

Portugal is the third Eurozone member to seek a bailout, behind Greece and Ireland after the government failed to get its austerity plans passed through parliament.