Brussels, 11/04/2013 (Agence Europe) - The European Commission is putting pressure on European finance ministers to get them to take a decision in principle in Dublin on Friday, which would then be finalised in May, to extend the repayment deadlines for the loans to Ireland and Portugal (see EUROPE 10824).
On Wednesday, Euro Commissioner Olli Rehn said it was important for the Eurogroup to be able to take a decision in Dublin. Extending the repayment deadlines would help the two countries in their bid to return to the money markets unaided. The Irish decision would be easier to take because the country's creditors always praise the government's progress in implementing the structural adjustment programme.
The situation is trickier for Portugal, which is in deep recession (the economy shrank by 3.2% of GDP in 2012), although the troika needs to demonstrate that a southern European nation is able to solve its crisis by applying the painful solutions recommended by the Eurogroup. The government has been forced to alter its draft budget for 2013 because the country's constitutional court has ruled that €1.3 billion-worth of budget measures are illegal (see EUROPE 10823). Finance minister Vitor Gaspar is expected shortly to unveil new measures to achieve the same budget savings. Rehn said it was important that a decision be made rapidly once it is clear that the new measures will enable Portugal to achieve the budget targets, which have already been eased.
Technical experts from the Council of Ministers recommend a seven-year extension to the repayment deadlines for loans to the two countries. They had requested a further 15 years. (MB/transl.fl)