Portugal seeks more leeway over budget deficit
By Shrikesh Laxmidas |
April 28, 2011, Thursday
|
Print Edition
Print Edition
PORTUGAL may get more leeway in its efforts to reduce the budget deficit under an EU/IMF bailout, a newspaper reported yesterday, after the prime minister vowed to protect the country from excessive austerity.
European Union and International Monetary Fund officials are in their third week of talks in Lisbon after Portugal became the third eurozone country after Greece and Ireland to seek international aid, estimated at 80 billion euros (US$117.3 billion).
Caretaker Prime Minister Jose Socrates - campaigning ahead of an election on June 5 - said in an interview on Tuesday that he would "fight for a plan which does least harm to the country" during the bailout negotiations.
But officials have generally remained tight-lipped about what is being discussed in the talks and Socrates said that the negotiations for a deal - which must also be approved by the opposition - have to be conducted with "discretion."
Business paper Jornal de Negocios said the sides have discussed delaying Portugal's goals for cutting its budget deficit - currently those are 4.6 percent of gross domestic product this year and 3 percent next year. Although it also cited the leader of Portugal's second-biggest union as saying he had been told of the possibility during a meeting with the European Commission team head.
"At the meeting, the head of the team said Portugal only has to meet the 3 percent deficit target in 2013, adding clearly that it does not have to be next year," UGT Secretary General Joao Proenca told the paper.
Portugal has also twice in the last month raised its deficit figure for 2010 to conform with EU methodology, putting the deficit at 9.1 percent of GDP, compared to a goal of 7.3 percent.
Jornal Negocios said the upward revisions have forced the EU/IMF to consider allowing Portugal to hit the 3 percent deficit target only in 2013 to ensure the country's fiscal consolidation efforts remain credible.
European Union and International Monetary Fund officials are in their third week of talks in Lisbon after Portugal became the third eurozone country after Greece and Ireland to seek international aid, estimated at 80 billion euros (US$117.3 billion).
Caretaker Prime Minister Jose Socrates - campaigning ahead of an election on June 5 - said in an interview on Tuesday that he would "fight for a plan which does least harm to the country" during the bailout negotiations.
But officials have generally remained tight-lipped about what is being discussed in the talks and Socrates said that the negotiations for a deal - which must also be approved by the opposition - have to be conducted with "discretion."
Business paper Jornal de Negocios said the sides have discussed delaying Portugal's goals for cutting its budget deficit - currently those are 4.6 percent of gross domestic product this year and 3 percent next year. Although it also cited the leader of Portugal's second-biggest union as saying he had been told of the possibility during a meeting with the European Commission team head.
"At the meeting, the head of the team said Portugal only has to meet the 3 percent deficit target in 2013, adding clearly that it does not have to be next year," UGT Secretary General Joao Proenca told the paper.
Portugal has also twice in the last month raised its deficit figure for 2010 to conform with EU methodology, putting the deficit at 9.1 percent of GDP, compared to a goal of 7.3 percent.
Jornal Negocios said the upward revisions have forced the EU/IMF to consider allowing Portugal to hit the 3 percent deficit target only in 2013 to ensure the country's fiscal consolidation efforts remain credible.
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