Portugal is seeking to renegotiate parts of its international bailout agreement, amid worse-than-expected forecasts for an economy in recession and growing popular protest over deficit-cutting austerity measures imposed by its lenders.
Eurozone finance ministers are expected to discuss in Brussels a request by Portugal for more time to repay its loans, a concession that would help the country finance itself after the €78 billion bailout programme expires.The request, along with a similar one by Ireland, would mirror the terms Greece obtained under its latest bailout agreement. The Portuguese government is already awaiting approval on a request that its bailout lenders—the European Union and International Monetary Fund—allow it more time to cut its budget deficit to a targeted 3 per cent of gross domestic product from an estimated 5 per cent at the end of 2012.
Portuguese officials acknowledge they overestimated tax revenues and underestimated how much money the country would have to spend on social benefits to the unemployed. They say Portugal has been hit hard by a deeper-than-expected slowdown in the eurozone, with which it does most of its trade.
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© Wall Street Journal
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