Portugal has no funding problems despite the eurozone debt crisis: PM
PARIS: Portuguese Prime Minister Jose Socrates said his country can still raise funds from the markets despite the eurozone debt crisis because investors understand the reforms the government has introduced. "We are doing what we need to do-consolidating the budget deficit very quickly and very effectively on the basis of structural reforms," Socrates told the Financial Times in an interview Tuesday. "Markets will understand this more and more," he said. Portugal has come under increasing pressure in recent months after debt and deficit problems in first Greece and then Ireland led to EU-IMF bailouts when they could no longer raise fresh cash from the markets at sustainable rates.
The crisis drove speculation that Lisbon and possibly Madrid could be next in line although tensions have eased slightly since Ireland's rescue this month. While Portugal has to cover 20 billion euros (26 billion dollars) in due debt by mid-2011, Socrates said Lisbon would have no problems in funding. "Portugal has the necessary conditions to go on raising debt in the market," he told the FT. "We have had no banking crisis or property bubble. Our only problem was an excessive budget deficit due to the global crisis and we are correcting that. Socrates said government reforms, especially on pensions and social security reform, meant Portugal was doing better than other countries in stablising its public finances. -Ap