Tags: Portuguese Central Banker Admits We Need a Bailout

Portuguese Central Banker Admits: We Need a Bailout

Wednesday, 12 Jan 2011 08:12 AM

Portuguese Prime Minister Jose Socrates attempted to put a floor under persistent talk that his country will seek an international bailout, saying there are no such plans and that the 2010 budget gap was lower than its goal.

But central bank board member Teodora Cardoso was quoted earlier this week as saying that Lisbon would do better to seek international financing, breaking ranks with political leaders.

"It would be easier if we had foreign help because this would mean that the adjustment would not be so abrupt, but if we do it alone, for the markets to believe in it, it has to be brutal," Cardoso said according to news agency Lusa.

Meanwhile, Socrates cited preliminary data as showing the budget deficit ended 2010 below the target of 7.3 percent of gross domestic product promised to Brussels, meaning that the country cut its deficit by more than 2 percentage points from 2009's highs of 9.3 percent.

"The country is doing its work and is doing it well... Portugal is one of the countries in Europe that cut its deficit most in 2010," Socrates told reporters.

"I'd like to point out that the Portuguese government and Portugal will not ask for any aid or financial assistance for the simple reason that it is not necessary."

Portugal is seen by economists as the country most likely to follow Greece and Ireland in seeking international support in a widening euro zone debt crisis.

Socrates said the country would keep financing itself.

Calling the deficit reduction "an excellent result for Portugal," Socrates said that higher-than-expected revenues and more controlled spending created budget leeway of 800 million euros, or 0.5 percent of GDP last year.

This year's target is even more ambitious as the government plans to slash the deficit to 4.6 percent of GDP after adopting a range of painful austerity measures such as wage cuts for civil servants and higher taxes.

© 2017 Thomson/Reuters. All rights reserved.

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Portuguese Prime Minister Jose Socrates attempted to put a floor under persistent talk that his country will seek an international bailout, saying there are no such plans and that the 2010 budget gap was lower than its goal. But central bank board member Teodora Cardoso...
Portuguese Central Banker Admits We Need a Bailout
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2011-12-12
 

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