Lisbon, Portugal - Portugal will obtain loans from the IMF at a rate similar to those granted to the Greece and Ireland, officials said Thursday, but Lisbon is still pending from other European countries to decide how much they charge you for their slice of a euro78 billion ($115 billion) bailout.
On the huge loan interest rates are a crucial aspect that the struggles of countries ill for free its massive debts and Portuguese officials were keen to avoid the rescue terms that could thwart the economic growth necessary to create jobs.
Greece and in Ireland, the other two debt crisis victims, worn in what they complained were punitive rates on their rescue plans agreed last year. They said that the terms of recovery and deep spending cuts were injured attempts to restore their financial and economic health more wide.
The confidence of the markets is therefore bad in Greece that many investors believe the country will finally back on treats debt, a Portugal position is keen to avoid.
Portugal will pay the interest rate from 3.25 to 4.25% for part of the Monetary Fund his ($115 billion) bailout billions of euro78 International, said a senior official with the IMF. Those who are close to those provided to Athens and Dublin.
Poul Thomsen, said Thursday that the lower rate will apply for the first three years of rescue, while more will start after this. The IMF will provide one-third of all, the rest from the countries of the European Union and the euro area.
The representative of the EU that Juergen Kroeger, said the interest rate to be charged for the portion of the block of loans has not been determined and that would probably happen on 16 may, when EU finance ministers gather to sign offshore on the rescue plan.
This delay could be disturbed by the recent elections in Finland, where a skeptic anti-bailout party could be part of the new Government and are reluctant to send taxpayers money to countries considered as fiscally lax.
A decision is also made to be accepted by a wider discussion in the block of the currency. In March, the leaders of the euro zone have agreed in principle to lower the interest rates charged for their rescue plans, but have not yet reached a final agreement, partly because of disagreements with the Ireland on the rate that it is being charged.
Necessary Portugal, the rescue plan because it has become virtually cut off funding for the market - needed to run its economy and to settle its debts - as investors demand extremely high rates for lending money to a country considered as risky.
The performance of its obligations to 10 years was slightly down Thursday, but still an unsustainable 9.6%. Pay those rates denies funds Portugal to invest in economic growth and pay its bills. Authorities have said the country will be unable to meet repayments of debt scheduled for June.
Thomsen, the IMF, said that the rescue plan will allow Portugal to stop raising funds on the markets of the debt for a little more than two years. This "will give the Government of the respite" to implement the necessary changes to the way in which its economy is run, he added.
Portuguese banks, which are dependent on the support of the liquidity of the ECB will be forced to boost buffers of capital strongly - by more than required under the international banking rules. If they cannot raise the extra money on the market, the Government can use part of rescue to help.
It is particularly important because the Portuguese economy through recession and bad-loan rates will likely rise to stabilize stream banks.
Lack of economic performance of the Portugal over a decade, when he posted an average annual growth of 0.7%, is at the heart of its cash flow problems.
The Minister of Finance Fernando Teixeira dos Santos, said that Portuguese officials had gained favour after more than two weeks of negotiations with the delegates of the European Union, the European Central Bank and the IMF.
He said "an effort has been made to adopt measures that hurt growth" and improve the fragile economic competitiveness of the Portugal.
"It is a good program (rescue) and we do not lose the opportunity," he said.
EU economic and Monetary Affairs Commissioner Olli Rehn, stated that the package seeks to stimulate growth, to reduce the public debt and ensure the stability of the banking sector.
"The Portuguese economy is facing considerable challenges and we believe that the bold measures undertaken will enable to get back on track" Rehn said in a statement.
Despite this, the dark days ahead for the Portuguese. The program provides an economic contraction of 2% this year and next, with a growth of return only in 2013, while the unemployment rate is seen amounting to 13 per cent of 11.1% today. Public debt should continue its growth through 2013.
"The program is bold, but it is realistic," Thomsen of the IMF said, dismissing claims that the package of the Portugal was more lenient than those imposed on the Greece and the Ireland.
He warned that "the economy will have significant turbulence" over the next three years, as the bite of austerity measures.
The rescue plan provides a broad round of increases in tax and welfare cuts which will likely reduce the standard of living in what is already one of the poorest countries of Western Europe. The unions have had difficulty more than austerity measures after a year of deep cuts as Portugal blurred to avoid requesting a rescue plan.
Three main political parties of the Portugal have given their blessing to the agreement. Foreign delegates insisted on a broad consensus to ensure that the country remains locked in the program anyone wins a general election on 5 June.
The plan aims to cut State deficit of the Portugal to 5.9% this year to 4.5 following percentage and 3 per cent in 2013.
Higher taxes and a privatization program will help increase revenue, said Teixeira dos Santos.
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Steinhauser contributed Brussels.
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