78 Billion Euro deal done


Portugal’s acting Prime Minister Jose Socrates has agreed a €78 billion deal with the EU and IMF.

The two main opposition parties, the Social Democratic Party (PSD) and the Democratic & Social Centre – People’s Party (CDS-PP) will meet with the EU and IMF representatives today.

Although there is still some haziness about what is in the agreement, the newspaper Diario Economico is suggesting that there will be a €12 billion to bail out the banks, although wages won’t be cut there will be the continued reduction of civil servants possibly by as much as 8,000 per annum, a reduction in spending and increased taxes with the Bank of Portugal looking at the possible effects of a 2% rise in VAT.

There is also some suggestions that TAP the state airline along with energy companies EDP and REN could be privatised and the BPN bank privatised by late July.

In an initial reaction, Miguel Relvas the PSD general secretary described the deal as “the price of six and a half years of failure and incompetence”.

There is a general election in Portugal on 5th June.

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