LISBON: Portugal has passed the final bailout audit by IMF-EU experts, the government said yesterday in a major step towards becoming the second eurozone rescue success story after Ireland.
“The 12th evaluation has been overcome, and this opens the way to the end of the programme,” Vice-Prime Minister Paulo Portas told journalists, marking a big step forward from the national humiliation of near bankruptcy.
“We have passed the last evaluation. Portugal will be able to win back the slice of sovereignty which it had lost,” he said.
Portugal is now set to emerge from the bailout on May 17, and is expected to try to finance itself on bond markets without a so-called safety net, becoming the second stricken eurozone country to recover after Ireland.
In a sign that the strains of the eurozone debt crisis, which at one point threatened to break up the zone, are fading, the Spanish 10-year borrowing rate dipped below 3.0 percent on the eurozone bond market on Friday for the first time since 2005.
But Portugal is still enacting the latest round of severe measures to keep its public finances within targets laid down by the International Monetary Fund, European Union and European Central Bank.
Rafts of reforms tied to rescue loans pushed the country into recession and the people into severe hardship, with cuts in pay, pensions and public services.
Portas said: “Portugal has done what it had to do to be able to win back its financial autonomy, and this gives sense to and makes worthwhile the sacrifices made by the Portuguese people.”
He said: “This programme required the Portuguese people to make very painful efforts. We have turned a page, ending what I have described as a protectorate.”
The auditors, who began their last audit of progress on reforms on April 22, finished their work late on Thursday after marathon negotiations.
Their approval of the national accounts and progress opens the way for the release of the last payment of ¤2.6bn of the total rescue package of ¤78bn ($108bn) extended in May 2011.
Portugal has yet to lay out the procedures it intends to use to finance itself normally and fully on the international debt market.
It is expected to follow the example set by Ireland and issue bonds without having the back-up of a precautionary line of credit, a route which would be pinned on a high level of confidence that investors would subscribe substantially to buy the bonds.
The government said it will decide on its strategy at a special cabinet meeting late on Sunday before eurozone finance ministers next meet on Monday.
European Commission President Jose Manuel Barroso, who is Portuguese, recalled at the end of March that three years ago “Portugal was on the edge of the precipice” with scarcely 300 million euros available, and not enough to pay civil servants up to the end of 2011.
The then Socialist prime minister Jose Socrates, having resisted pressure from financial markets for several months, finally gave way and on April 6, 2011, followed Greece and Ireland in appealing to the European Commission for help.
AFP
