Portugal Reaches EUR 80 M Bail-Out Deal

In a televised statement, Portugal's Prime Minister Jose Socrates said the three-year loan was a "good agreement that defends Portugal". Photo by EPA/BGNES

Portugal's caretaker prime minister Jose Socrates says he has reached agreement on a bail-out from the EU and the International Monetary Fund.

"I would like to announce to the Portuguese people that the government has reached agreement today with the representatives of international institutions on the programme of financial aid to our country," he said.

In a televised statement, Socrates said the three-year loan was a "good agreement that defends Portugal".

Portugal will be asking for financial assistance worth EUR 78 B.

Officials from the European Commission, European Central Bank and IMF have been working on a deal for three weeks.

Socrates said that Portugal would be given more time to reach its budget deficit targets than had previously been expected.

The deficit will have to be cut to 5.9% of GDP this year, 4.5% in 2012 and 3% in 2013.

Portugal had previously aimed to reduce the deficit to 4.6% this year, 3% in 2012 and 2% in 2013.

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