Arriving in September 11,5 billion for Portugal. The team in charge of monitoring the country said that the reforms taken by the government are "credible". The big three institutions International Monetary Fund (IMF), European Union (EU) and European Central Bank (ECB), also known as the Troika, said they were "confident that the objectives will be achieved".
The Lusitanian country seems to be willing to do anything to achieve the goal of reducing the deficit from 9,1% of GDP to 5,9% by the end of the year. Even before the Troika technicians declared the verdict, the Finance Minister, Vitor Gaspar, announced new cuts to balance public finances: an increase in VAT on electricity and natural gas from 6% to 23% in the last quarter of the year and not in 2012, as expected . Jürgen Kröger of the European Commission said they did not expect new tax hikes from Portugal.
The go-ahead was therefore given for the second tranche of aid worth 11,5 billion euros expected in September. The European Union will contribute 7,6 billion and the IMF with 3,9. However, formal approval by the Fund's Executive Council and the rest of the European countries will first be required.
The Troika underlined the need for a capital increase in the Portuguese banking sector to reduce the effects of financial debt. According to the representatives, these problems must be overcome in order to access the markets as soon as possible in view of the economic recovery, since the country will suffer a 2,2% contraction of GDP this year.
Furthermore, the ECB has asked for greater control over spending in the autonomous regions of Portugal, especially in the case of the Madeira archipelago, whose accounts have shown a hole of 227 million euros in recent days.
Sources: The country, Diario de noticias
