Portugal must absolutely continue efforts to reduce its debt and deficits, said Wednesday, Jan. 12, Christine Lagarde, French Minister of Economy. "Portugal is in the process of providing results that are better than the commitments that were made and I think that is likely to reassure investors," she said on France 2."It is imperative that it continues because structural reforms are needed," she added. "My hope is that they will honor their commitments and more, and that under these conditions investors will look sympathetically Portuguese debt," said the French minister. The governments of 17 countries of the eurozone plan to increase the amount of permanent emergency fund for countries of the area and reduce the rate allocated to Ireland, says the German newspaper Die Welt on Wednesday.
The newspaper, quoting diplomats in Brussels said it planned to increase the amount of actual loans currently some 250 billion euros, increasing loan guarantees, amounting to 440 billion euros, or by providing "technical changes". "We must deliver a signal to markets of credible political commitment," said a diplomat with the German newspaper.
Under discussion is also lower rates for troubled countries benefiting from this fund, like Ireland. Rates allocated to Ireland for loans by the EU countries and the Commission have averaged 5.8%, the source said. However, according to these diplomats, these rates are much higher than expected and Irish growth are indeed too high.
The rates must be reduced to "tolerable levels", the source said. However, the newspaper said, it is still only thoughts and no decision is expected at meetings of finance ministers from the EU and the euro area planned Monday and Tuesday in Brussels. Mid-December, EU leaders have set in motion a sustainable mechanism of financial assistance to enable the euro area more resilient to crises, and assist its members who might need such as Greece and Ireland.
The amount of the funds had not been clearly defined. It must be at least as important as the safety measure current set up in the emergency spring and will expire mid-2013 and has a total of 750 billion euros of lending capacity, including 440 billion euros from the euro area. Ireland had also negotiated in November with the EU and the International Monetary Fund (IMF) on a rescue plan totaling 85 billion euros, spread over several years designed primarily to shore up its banking sector.
- EC denies talks on Portugal bailout (10/01/2011)
- Portugal Is Lashing Out At The EU Over Bailout Demands And Failure To Stabilize Euro (11/01/2011)
- Here We Go Again: Germany And France Are Pushing Portugal To Accept A Bailout Now (09/01/2011)
- The Tragedy Of Portugal (10/01/2011)
- Europe Update: Portugal (09/01/2011)
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