Brussels, 16/04/2014 (Agence Europe) - Portugal announced new savings of €1.4 billion on 15 April in order to reduce its public deficit to 2.5% of GDP next year.
The bulk of the measures reduce ministerial expenditure and reshuffle the civil services, without demanding extra sacrifices from the people, explained Finance Minister Maria Luis Albuquerque. The country's public deficit stood at 5.5% of GDP at the end of 2013 and it is hoped that this will be reduced to 4% in 2014.
After the troika's assessment of the country in February (European Commission, European Central Bank and International Monetary Fund), Portugal promised to submit measures to reduce the public deficit to 4% in 2014 and 2.5% in 2015, as required in agreements with the troika. Publication of the measures was a precondition for releasing a final batch of aid worth €900 million, and come a week ahead of the troika's arrival for its final assessment mission.
On 17 May, Portugal will exit its aid programme, three years after requesting a €78 billion bailout. It will publish details of its exit programme by 5 May (see EUROPE 11051). Several options are on the table: a clean break and an immediate return to the markets or a more gradual exit with coverage in the form of preventative credit from the European stability mechanism. The European Commission and Portugal's president, Anibal Cavaco Silva, who is a member of the prime minister' Centre-Right party, are calling for the use of preventative credit. (SP)