Portugal and Ireland Win IMF-EU Bailout Extension

Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.


Eurozone finance ministers on Friday agreed to give Ireland and Portugal seven more years to repay their bailout loans, in a bid to help the two euro nations wean themselves off bailout money in the coming year.

The loan repayment extensions are intended to ease the financial burden on both countries, giving them more time to recover from the debt crisis after their bailout loans run out. Ireland’s loans run out later this year and Portugal’s in 2014.

Prolonging the payment schedules would also allow them to obtain better terms from private lenders.


Eurozone finance ministers on Friday agreed to give Ireland and Portugal seven more years to repay their bailout loans, in a bid to help the two euro nations wean themselves off bailout money in the coming year.

The loan repayment extensions are intended to ease the financial burden on both countries, giving them more time to recover from the debt crisis after their bailout loans run out. Ireland’s loans run out later this year and Portugal’s in 2014.

Prolonging the payment schedules would also allow them to obtain better terms from private lenders.

Dutch finance minister and president of the so-called Eurogroup on Friday praised Portugal on its success in implementing the bailout programme but “asked them to maintain the reform momentum despite the difficult economic and domestic conditions.”

Last week, the country’s Constitutional Court overturned part of the government’s austerity programme that was agreed to in return for a 78 billion euros bailout from the European Union and IMF in 2010. If Portugal strays from the programme, it may not remain eligible for additional bailout money.

Related News: Portugal’s President & Prime Minister Clash over Austerity Budget

Related News: Spain, Portugal Seek Help From Former Latin America Colonies

Lisbon called the current repayment schedule “impossible” and said it deserved an extension amid a tough austerity drive.

“It’s important because after two years of very tough efforts and sacrifices shared by all Portuguese, if we now achieve, as we deserve, the ability to pay back our loans under reasonable rather than impossible conditions … it’s good for the country,” said Portuguese foreign minister Paulo Portas.

Dijsselbloem added that “Ireland is a living example that adjustment programmes do work, provided there is a strong ownership and genuine commitment to reforms.”

“Ultimately it is the combination of growth-enhancing structural reforms and consistent fiscal consolidation that will firmly re-establish investor confidence and ensure that the Irish and Portuguese people can put this very hard crisis behind them and move on,” said Olli Rehn, the European Commissioner for Economic and Monetary Affairs.

Related News: Ireland to End Controversial Bank Guarantee Scheme

Related Story: Will Europe’s Austerity Lead To Another Great Depression?: Dan Steinbock

About EW News Desk Team PRO INVESTOR

Latest news about the state of the world economy.