Portuguese banks tap state bailout money

THREE of Portugal’s biggest lenders are to receive a €6.6bn (£5.3bn) bailout, mostly from the country’s €78bn EU/IMF rescue money, after failing to make ends meet.

Millennium BCP, Banco BPI and Caixa Geral de Depositos have all asked the government for help in meeting the emergency capital requirements set out by Europe’s banking regulator, the European Banking Authority (EBA).

The banks will receive the money in the form of convertible bonds that turn into equity if not paid back in five years.

Finance minister Vitor Gaspar unveiled the bailouts on Monday but claimed that Portugal is on track with the budget cuts demanded of it by international creditors.

Under the terms of its rescue, Lisbon must get its deficit down to 4.5 per cent of GDP this year.

But worries about the country’s finances have been stoked by poor joblessness figures. Unemployment rose to 15.2 per cent in April and official predictions now put it at 15.5 per cent this year.