IMF approves $37 billion for Portugal

Rick Moran
One hundred billion Euros for Greece, 85 billion for Ireland - now it's 37 billion for Portugal from the IMF bringing the total to over 100 billion Euros for them.

When is Europe going to run out of other people's money?

Reuters:

"The financing package is designed to allow Portugal some breathing space from borrowing in the markets while it demonstrates implementation of the policy steps needed to get the economy back on track," the IMF said in a statement.The financial package was calibrated to allow Portugal to stay out of the market for medium- to long-term bonds for slightly more than two years, IMF Mission Chief Poul Thomsen said.

Under the agreement, Lisbon will have to carry out steep spending cuts, raise taxes, reform its labor and justice systems, and embark on an ambitious privatization scheme.

"The Portuguese authorities have put forward a program that is economically well-balanced and has growth and job creation at its center," said IMF Acting Managing Director John Lipsky.

"It addresses the fundamental problem in Portugal -- low growth -- with a policy mix based on restoring competitiveness through structural reforms, ensuring a balanced fiscal consolidation path, and stabilizing the financial sector," he added.

The deal follows a 110-billion-euro package for Greece last May and an 85-billion-euro program for Ireland in November.

Greece is already planning to renege on reforms they promised to make, Ireland is itching to renegotiate terms, and now Portugal will have to tighten its belt, losing 2% of its GDP this year and next year. How long they stick with the plan while the pain suffuses through their economy is open for debate.

When economic reality butts up against political necessity, guess what wins?



One hundred billion Euros for Greece, 85 billion for Ireland - now it's 37 billion for Portugal from the IMF bringing the total to over 100 billion Euros for them.

When is Europe going to run out of other people's money?

Reuters:

"The financing package is designed to allow Portugal some breathing space from borrowing in the markets while it demonstrates implementation of the policy steps needed to get the economy back on track," the IMF said in a statement.

The financial package was calibrated to allow Portugal to stay out of the market for medium- to long-term bonds for slightly more than two years, IMF Mission Chief Poul Thomsen said.

Under the agreement, Lisbon will have to carry out steep spending cuts, raise taxes, reform its labor and justice systems, and embark on an ambitious privatization scheme.

"The Portuguese authorities have put forward a program that is economically well-balanced and has growth and job creation at its center," said IMF Acting Managing Director John Lipsky.

"It addresses the fundamental problem in Portugal -- low growth -- with a policy mix based on restoring competitiveness through structural reforms, ensuring a balanced fiscal consolidation path, and stabilizing the financial sector," he added.

The deal follows a 110-billion-euro package for Greece last May and an 85-billion-euro program for Ireland in November.

Greece is already planning to renege on reforms they promised to make, Ireland is itching to renegotiate terms, and now Portugal will have to tighten its belt, losing 2% of its GDP this year and next year. How long they stick with the plan while the pain suffuses through their economy is open for debate.

When economic reality butts up against political necessity, guess what wins?