Brussels, 17/12/2013 (Agence Europe) - On Monday 16 December, Portugal's lenders made a positive assessment of their tenth monitoring mission (4-16 December), thus paving the way for payment of one of the final instalments of the €78 aid programme negotiated in 2011, an instalment of €2.7 billion.
In a joint press release, the European Commission, the European Central Bank and the International Monetary Fund say: “Further signs of recovery have emerged since the last review. Growth is broadly in line with projections, while unemployment has fallen by more than expected. External rebalancing has continued, although imports have picked up, reflecting stronger-than-expected domestic demand”.
The troika explains: “The programme's fiscal targets have been confirmed. With tax collections performing well, the 2013 deficit target of 5.5 percent of GDP is achievable. The 2014 budget was approved by Parliament with only a few changes. It includes important steps towards rationalising and modernising public administration, improving the sustainability and fairness of the pension system, and lowering costs across ministries. If some of these measures are determined to be unconstitutional, the Government has re-affirmed its commitment that it will then identify and implement compensatory measures of high quality to meet the agreed deficit target of 4 percent of GDP. Such measures, however, could heighten risks to growth and employment and reduce the prospects for a sustained return to financial markets”. The president of Portugal, Anibal Cavaco Silva, has launched a court case over the austerity measures, and the thirteen constitutional court judges will be ruling later this week on an unpopular measure to cut civil servants' pensions by nearly 10%.
At a hearing at the EP's economic and monetary affairs committee on Monday afternoon, the head of the ECB, Mario Draghi, would not comment on whether Portugal could exit the aid programme in June 2014, but said it might need a transition programme to help it make a smooth return to the financial markets (something the Portugal government has already considered). (SP/transl.fl)