Brussels, 05/05/2014 (Agence Europe) - On Monday 5 May, the president of the Eurogroup, Jeroen Dijsselbloem, welcomed Portugal's decision to make a clean exit from its three-year financial aid package without requesting preventative aid from the European stability mechanism.
On his arrival for the Eurogroup meeting, Dijsselbloem said: “I'd like to congratulate Portugal on the fact they have taken this decision at the end of their programme. They have done a lot of hard work at great expense, coming out much stronger, high growth figures”. The Portuguese economy shrank by 6% between 2010 and 2013. Pointing out the European Commission's Spring Economic Forecasts of +1.2% of GDP growth for Portugal in 2014 and +1.5% growth in 2015 (see related article), Dijsselbloem said market circumstances were good, referring to the successful issuance of long-term debt by Lisbon. On Monday afternoon, the yield on Portuguese ten-year bonds was below 4%. Dijsselbloem called on the Portuguese government to keep up the momentum of structural reforms, as set out in the country's mid-term budget strategy published last week (see EUROPE 11071).
European Commission Vice-President Siim Kallas said: “Personally I am very supportive of the Portuguese government's decision”. He pointed out that the country had halved its budget deficit from 9.8% in 2010 to 4.9% in 2013 and restored a positive current account balance in just three years, but that low domestic demand was a matter of concern. The Commission had previously called for Lisbon to request preventative aid from the European stability mechanism.
On Sunday evening, Portuguese Prime Minister Pedro Passos Coelho said his government had taken the right decision at the right time, and it was the best way of properly defending Portugal's interests and meeting the aspirations of the Portuguese people. Politically, by shaking off the troika yoke, the Portuguese government has scored points ahead of the European elections on 25 May. (MB)