Lisbon, Portugal - Portugal terms rescue plan are "serious" and more lenient these Greece and the Ireland received, officials of the EU, said Wednesday in an effort to circumvent any exaggerated claims of two weight two measures.
In announcing a ($115 billion) bailout billions of euro78 imminent, caretaker Prime Minister of the Portugal claimed that he had won the terms easier than those imposed on the other two countries last year. The agreement by the Government coming out ahead of a June election requires approval of other political parties, but a softening conditions could fuel demands for revising the bargains of the Greece and the Ireland.
"He sold his highlights of the agreement," said an EU official, speaking on condition of anonymity because that negotiations continue, announces Jose Socrates ' Portuguese television Tuesday night. "You must take into account the fact that they are in an election campaign".
Portugal has battled for more than two weeks of negotiations to escape rescue terms that could hurt its efforts to restore economic growth, with a member of the Socialist Party, explaining that the rescue of two previous had been "huge lack."
The Greece and the Ireland have criticized their creditors to impose conditions that threaten to thwart their attempts to rebuild their economies. Although the official details of the agreement of the Portugal cannot be made public before Thursday, Athens and Dublin will closely observe the signs they can hope for a term of easy recovery.
Socrates said that Portugal had won "a good case" that he spared by the sector public pay cuts and layoffs, a reduction in minimum wage, the Elimination of the Christmas bonuses and holidays, and changes in the retirement age.
Portugal no escape austerity, however. The proposed rescue plan include terms taxes hikes in sales, property and the health service; unemployment benefits cut to 18 months to three years; cuts to the State pensions are more euro1, 500 ($2,217) a month.
Planned privatization include the flag carrier TAP Air Portugal and airport management company ANA, national company CTT and mail issues in energy company EdP and REN electricity distribution company.
Public works projects, such as a rail link high speed towards the Spain, are to be postponed.
Portuguese banks should receive euro12 billion ($17.7 billion) the amount of salvage to facilitate their liquidity problems. This news sent as their significantly higher shares on the stock exchange of Lisbon, with Banco Portugues do Investimento 4.9% increase.
The interest rate on loans of rescue - an essential aspect of the rescue agreement - was not yet revealed.
"International institutions have recognized... that the circumstances of the Portugal are very different from those of other countries and very different from the image that some people here to paint," said Socrates, who has submitted his resignation in March, but remains in Office until the elections in early June.
Details of the final agreement will be announced as soon as it has the support of the opposition, probably Thursday, said the EU official. The agreement is negotiated by the delegates of the European Union, the Central Bank European and Monetary Fund International.
"It is still a severe adjustment," the official said of the rescue program, adding that most of the budgetary and structural reforms would have to come this year and next. His assessment was supported by an official of the second, also refused to be named.
Portugal Gets an additional year - until 2013 - to reduce its budget deficit ceiling of 3% of the EU, but this extension was necessary, the country is much larger than the deficit of the budget for last year. The country now has to reduce its deficit to 5.9% at the end of this year by 9.1% in 2010 and 4.5 per cent in 2012, Socrates said.
The EU is that all the main parties to the Portugal to support the rescue program to ensure that it will be applied in full, that took power after the vote on June 5. To reach a final agreement is further complicated by the recent elections in Finland, where a skeptic anti-bailout party could be part of the new Government.
News of an imminent agreement "should be treated in a positive way, but the Portugal has a great adjustment programme until she needs further important structural reforms while achieving radical deficit reduction," analysts at Barclays Capital said.
"Overall, the size of the package of signals to determine the authorities of the EU to ring-fence problems in the periphery, particularly given the market concerns high on the Greece and the subsequent contagion risks that could arise from that""," he said.
The market pressures were evident in a Portuguese debt sales Wednesday. The Government has managed to raise euro1.12 billion ($1.67 billion) in funding in the short term, but the rate of interest required by investors was high. The yield on the 3-month Treasury bills is 4.65% - up compared to 4.05% on the same claim two weeks ago.
Costs of borrowing of Portugal hit unsustainable levels, with the performance of its obligations for 10 years, up 9.34%, forcing it to seek a financial rescue plan to stave off bankruptcy. Authorities say Portugal will be not able to settle debts expected in June.
"Clearly the rate was very high for a such loan short term, but (Portugal) succeeded to raise a little more that he had wanted," Filipe Silva, Manager of the debt to the Portuguese financial group Banco Carregosa, said. "Now, we just know what rate it will pay on the loan of rescue."
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Steinhauser contributed Brussels.
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