Portugal doesn’t need IMF help: PM
LISBON: Portugal has the means to overcome its fiscal crisis on its own and doesn't need to ask the International Monetary Fund for help, Portugal's prime minister, José Socrates, said in an interview.
"We don't have any problem that requires us to ask the International Monetary Fund for help," Mr. Socrates said in a Friday interview with Portuguese newspaper Diario de Noticias. "Our problem is a problem regarding our deficit."
He said he regretted that the international markets haven't reacted more objectively to the government's austerity measures but added that the "markets will slowly realize that Portugal is doing what needs to be done to consolidate its government budget in order to give confidence back to the international markets."
Portugal is facing increased borrowing costs to finance its budget and spiraling public debt because international investors are concerned that the exportdependent country of a little over 10 million people hasn't done enough to pare back its budget deficit. The government is imposing severe measures to cut the deficit, including reducing salaries of public workers and raising taxes, but economists say the measures may not be enough to appease international investors because of expectations of low or no economic growth in coming years.
The government has promised to cut its budget deficit to 4.6% of gross domestic product next year from 7.3% of GDP in 2010, a move that is likely to curb growth and to increase unemployment, currently at 10.9%. According to European Union estimates, the Portuguese economy will shrink 1% in 2011, after expanding 1.3% this year.
Prime Minister Socrates said many other European countries also are pursuing austerity packages in order to prevent the sovereign-debt contagion from spreading. The contagion has claimed Greece and Ireland as its latest victims and is threatening Portugal and Spain. -PB News
TUNIS: Seiji Maehara, Minister for Foreign Affairs of Japan (R), and Amr Moussa, The Arab League's secretary-general (L) speak to journalists following their meeting during the 2nd meeting of the Arab-Japan Economic Forum 'A new Chapter for Mutual Prosperity' on December 12. -Ap