September 11, 2013 / 9:25 AM / 5 years ago

Portugal government seeks to ease 2014 deficit goal

Portugal's Prime Minister Pedro Passos Coelho (R) and Deputy Prime Minister Paulo Portas smile during the debate to vote on a motion of confidence in Lisbon July 30, 2013. REUTERS/Rafael Marchante

LISBON (Reuters) - Portugal’s government is trying to persuade its EU/IMF lenders to ease the budget deficit goal set for next year to 4.5 percent of GDP from 4 percent, Deputy Prime Minister Paulo Portas said on Wednesday.

Prime Minister Pedro Passos Coelho has said the country may require a further easing of the target set out under its bailout deal, but Portas’ remarks are the strongest indicator yet that such talks may already be underway. He met representatives of the lenders in Brussels, Frankfurt and Washington last week.

“It’s no secret that the government and the troika had different positions during the seventh bailout review about the deficit ... The government continues to think that 4.5 percent is the most adequate goal,” he told a parliamentary commission.

The next review of the country’s EU/IMF bailout begins on Monday. Its lenders have already eased this and next year’s targets, in March, due to a steeper than expected recession in Portugal and Europe. This year’s target is 5.5 percent. The deficit last year was 6.4 percent.

“Portugal has every interest to reach the 2014 end of the bailout meeting all its goals,” Portas said.

He reiterated the government’s stance that it wants to exit the bailout in mid-2014 as planned and avoid a similarly strict new program. Portas said a possible precautionary program would not be tantamount to a full bailout, which he said effectively makes Portugal an EU/IMF protectorate.

Reporting by Andrei Khalip; Editing by Catherine Evans

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