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Eurozone finance chair predicts Portugal will avoid bailout

Video by Elena CASAS

Text by NEWS WIRES

Latest update : 2011-03-25

Luxembourg's Prime Minister Jean-Claude Juncker, who chairs the group of eurozone finance ministers, said Friday that Portugal will likely be able to avoid a bailout but added that if one is needed, €75 billion would be "appropriate".

AFP - Luxembourg Prime Minister Jean-Claude Juncker, who chairs the group of eurozone finance ministers, told a German radio [station] Friday that Portugal would be able to forego asking for financial aid.

"I do not think that Portugal will ask for financial assistance," Juncker told Deutschlandfunk in an interview.

The European Union leader acknowledged that the situation in Portugal was "very complicated" after Prime Minister Jose Socrates said late Wednesday he would step down after losing a parlimantary vote on austerity measures.

The resulting political uncertainty led two of the top international ratings agencies to cut Portugal's credit ratings by two points Thursday.

But "whoever is in power in Lisbon will have to know that budget targets must be strictly respected," Juncker said.

Socrates' austerity budget aimed to cut the Portuguese public deficit to 4.6 percent of national output this year, to 3.0 percent in 2012 and 2.0 percent in 2013.

Speaking Thursday at an EU summit in Brussels, Juncker had stressed that "Portugal won't be left exposed by its European partners."

Should Lisbon require assistance, he suggested 75 billion euros (almost $100 billion) would be "appropriate" -- but only "under strict conditions."

Juncker said Friday that it was up to the Portuguese government to decide if it needed aid.

 

Date created : 2011-03-25

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