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The Portuguese Prime Minister has claimed a ‘victory’ over Ireland after negotiating better terms on his country’s EU/IMF bail-out.
Portugal joined Ireland and Greece as the bail-out brothers on Tuesday when agreement was reached on a $115billion rescue fund for the cash strapped nation.
Caretaker Prime Minister Jose Socrates has said the terms of the deal are less onerous than those set for Greece and Ireland by the European Union and the International Monetary Fund.
“The three year loan is a good agreement and a better deal for Portugal than Ireland or Greece,” Socrates said in a televised address to his compatriots.
“The government has obtained a good deal. This is a deal that defends Portugal. I have always said that asking for aid would be the final way to go, but we have reached the moment.”
Under the deal the Portuguese have been given more time than expected to cut their budget deficit. The target for 2011 has been raised to 5.9pc of gross domestic product from 4.6pc and the deficit must be cut to 4.5pc of GDP in 2012 and 3pc in 2013.
The interest rate to be charged to Portugal will be set at a meeting of EU finance ministers in a fortnight’s time.
Irish Minister for Finance Michael Noonan hopes to negotiate a lower rate of interest on Ireland’s bail-out once the Portuguese rate has been set.
Portugal will now go to the polls at the start of June to elect a new government to oversee the EU/IMF deal.