Brussels (Reuters) - Portugal and the Greece spoke of the benefits of the Lisbon decision to accept a bailout of billions of euro of the European Union and the IMF on Wednesday, but the Outlook for the two countries and the Ireland remain very uncertain.
Janitor of the Portugal Prime Minister Jose Socrates announced late Tuesday that he had reached a preliminary agreement with the EU, IMF and the European Central Bank for a set of three years of support, including help for banks of Lisbon.
Representatives of the Portuguese Government, declared that the aid would amount to EUR 78 billion, with 12 billion that banks of the Portugal. But a source said senior euro area range EU officials were working with was still 75-90 billion euros, depending on how many banks will eventually need.
The figures are expected to be finalized in talks in the coming days, said the source.
The rescue plan means three of 17 countries of the euro area are now effectively in financial intensive care - accepted Greece 110 billion euros of bilateral loans a year ago and Ireland signed a rescue package of EUR 85 billion last November - with fiscal and economic prognosis for the darkened three long term.
Financial markets reacted positively but cautiously to the Portuguese agreement, even if essential details have not yet formally announced including the interest rates on loans and specific measures that Lisbon must adopt in Exchange Help.
Yields on the Portuguese government debt fell, the spread of the performance of the obligations of the Government of 10 years on German bunds tightening by about 20 basis points to 675, an indication of the lowest risk, although it remains at very high levels.
Socrates, who is seeking re-election on June 5, said that he had obtained a good deal, he added: "There is no financial assistance program who do not apply."
The Greece, which raised the possibility of renegotiation of the elements of its packaging and that, according to many analysts may be forced to restructure its debts in spite of its plan to rescue, said the Portugal assistance should help solve financial markets.
"This agreement will help to reduce the uncertainty on the markets, which is something all the needs of Europe,"stated the spokesperson of the Government of George Petalotis."."
DIFFERENT PLANS
But there was less positive noises on the package to other neighbourhoods, with the Ireland concerned Lisbon may get a better deal than Dublin received five months ago.
Bailing out the Portugal must always be agreed by the opposition parties and signed by the euro-zone finance ministers at a meeting on May 16. There, the Finland, where the anti-bailout of true Finns were still in an election last month, may throw wrench in the works.
The euro area has three patients on three different regimes of Medicine: the Greece loans must be repaid over seven years at an interest rate average of 4.2%, more than seven years at an average rate of 5.8% of the Ireland (even if it is pushed to change the rate), and Portugal will be finalized within days.
"I think that the terms will inevitably be different in each country, because the circumstances are... different," said Minister of Eamon Gilmore, Ireland of Foreign Affairs.
"The Government would be very fed up too if another country became a deal to rescue better than the words we get," he told broadcaster state road
More than a year into the crisis of sovereign debt, which at its peak threatened to tear the European single currency, EU leaders are still fighting to get on top of the problem, instead of the bedding down of reliable long-term solutions.
Many analysts still expect of Greece, whose debts will increase to about 340 billion euros, or 150% of the annual production, this year, having to restructure its debts, either by writing off the coast of a part of them, either by rescheduling repayments.
Such a decision could have repercussions very widespread on the major French and German banks and the European Central Bank, which have large amounts of Greek debt. Seventy percent of the Greece sovereign bonds are held by foreign institutions.
The Minister of Finance of Greece has repeatedly dismissed the possibility of debt restructuring, said on Tuesday it would be a disaster for the country and its economy.
But there is more that the Greece will not be able to avoid a form any restructuring, with an increase in its debt ratio to GDP as the economy contracts and the cost of the unsustainable short-term loans - two years yields rest at 25.7%.
Michael Meister, Deputy of the Christian German Chancellor Angela Merkel Democrats parliamentary leader, said on Tuesday extending on eurozone bailout loans repayment schedule the Greece makes sense and decision makers in the European Central Bank Nout Wellink said he is open to the idea of extending the deadlines on all Greek debt.
That could help the Greece better weather its sovereign debt problems, but it would be to send reverberations through the rest of the economy of the euro area and immediately raise questions about the knowledge if the Ireland and the Portugal need also to restructure debts.
Portugal must roll on almost 5 billion euros of debt, June 15. It is in the hope that all the details of its rescue plan will be adopted at this time there so that it can carry out refinancing.
Jonathan Loynes, Chief Economist European Capital Economics in London, said plan of the Portugal rescue should reassure that Lisbon can meet its redemption to come, while adding: "It does put an end to speculation that - with the Greece and perhaps other - he will have sooner or later to undertake some form of debt restructuring".
(With additional reporting by William James in London, Andrei Khalip and Axel Bugge in Lisbon and George Georgiopoulos Athens, editing by Mike Peacock)
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