Portugal needs over €100 billion in aid - report

Portugal needs over €100 billion in EU/IMF loans, including up to €10 billion for its banks, but there are doubts whether Brussels will allow the bailout to exceed its initial target of €80 billion, Diario Economico newspaper said today.

3 May 2011, 12:00am

1 min read

The business daily said the technical team from the European Commission, European Central Bank and International Monetary Fund working in Lisbon had concluded that the country needed more funds than initially stipulated by Brussels.

It did not cite any sources. The newspaper said the banking sector required 5.3 billion euros to cover a hole left by failed bank BPN, as well as additional funds to help banks raise their capital ratios. BPN was nationalised in 2008.

The EU/IMF mission is expected to announce the terms of the bailout in the coming days, probably tomorrow, official sources familiar with the talks said.

Diario said the mission was due to meet representatives of the caretaker government and of the two main opposition parties later today. The main opposition Social Democrats and the centre-right CDS-PP have said they would back the bailout.

Portugal is preparing for a June 5 snap general election after the minority Socialist government resigned in late March following the rejection of its latest austerity plan by parliament.

Brussels wants to approve the loans before the election, by mid-May, and needs the main political parties to commit themselves to the bailout programme.

Last month, debt-ridden Portugal became the euro zone's third state to ask for a bailout, following months of soaring borrowing costs and the collapse of its government.

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People, prepare yourselves to pay more taxes and you can also forget that we will get the money that we loaned (lost) to Greece and Ireland. The same will now apply to Portugal and later Spain and other countries. As the saying goes, Is-self telf.