Brussels, 25/02/2013 (Agence Europe) - Representatives of the troika of lenders to Portugal (the European Commission, European Central Bank and International Monetary Fund) have been back in Lisbon for a new fact-finding mission since Monday 25 February to assess the new reforms undertaken as part of the programme of measures required in return for a financial aid package of €78 billion authorised in May 2011.
The fact-finding mission is set against the backdrop of a sharper than forecast economic recession. The European Commission now expects the country's economy to shrink by 1.9% of GDP in 2013, whereas it initially forecast recession of 1% (see EUROPE 10792). The Commission says the Portuguese public deficit will reach 4.9% in 2013, up from the previously forecast 4.5%.
Last week, the Portuguese government said it wanted an easing of its budget targets (see EUROPE 10790), but Euro Commissioner Olli Rehn said on Friday that it would be premature to discuss any such matter ahead of the fact-finding mission. The economy shrank by 1.6% in 2011 and 3.2% in 2012, leaving Portugal in its worst recession since 1975, with unemployment now standing at nearly 17% of the working population and 40% of under-25s.
The Portuguese government says the new fact-finding mission will take a few weeks. If there is a positive outcome, the troika will recommend disbursement of the next batch of aid (€2 billion). (SP/transl.fl)