“Portugal Announces ‘Clean Exit’ From EU-IMF Bailout”
EUObserver, May 5, 2014
“Portugal’s Prime Minister Pedro Passos Coelho on Sunday (4 May) announced the country will exit its three-year bailout programme without any further loans, just as Ireland did six months ago. … Eurozone finance ministers meeting on Monday in Brussels are expected to endorse the decision, with EU’s acting economics commissioner Siim Kallas saying that the commission ‘will support the Portuguese authorities and people in this sovereign choice’. The other international lender involved in the bailout, the International Monetary Fund, also welcomed the announcement. … With Portugal’s borrowing costs falling sharply this year, Lisbon was encouraged by its European partners to seek a ‘clean exit’, as further loans would be subject to approval in national parliaments, notably the German Bundestag. Portugal was forced to seek a €78bn bailout in 2011 and had to adopt harsh austerity measures which triggered mass protests and were partially struck down by the Constitutional Court. Coelho’s cente-right government stood the course, however, and replaced the rejected measures with other budget cuts, such as the closure of public schools and cuts to health care. After a deep recession, the Portuguese economy is growing again, but slowly and unemployment is still high (15.3%) even if it decreased from a peak of 17.7 percent.”
Quickie Analysis: A rare piece of economic good news coming from Europe.