LISBON (MNI) – Portugal has reached agreement on a E78 billion
bailout package with the European Union and International Monetary Fund,
the country’s caretaker Prime Minister Jose Socrates announced Tuesday
night.

He said the package was tied to a three-year plan to bring the
country’s deficit down progressively to 5.9% of GDP this year, from 9.1%
in 2010, then to 4.5% in 2012 and, finally, to the EU’s threshold of 3%
in 2013.

Socrates said the program was substantially similar to a government
austerity plan whose defeat in parliament led to the resignation of
Socrates and new elections to be held June 5. It will not require
additional budget cutting measures this year, will not cut the country’s
13th and 14th months of salary, or privatize social security, he said.

Socrates made the announcement in a brief televised address to the
nation, during which he did not mention the amount of the aid package.
His office later confirmed television reports that it would total E78
billion. In similar aid deals for debt-stricken Greece and Ireland, the
EU has generally provided about two-thirds of the loan money and the IMF
one-third.

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