Portugal raises €1bn from market

2011-05-18 14:33

Lisbon - Portugal raised €1bn on Wednesday in its first bond sale since an EU-IMF €78bn debt rescue deal was finalised this week.

The state public debt agency said the rate paid to buyers of the 2-month bills was 4.657%, compared with the 4.652% offered to investors in 3-month bills on May 4.

The three-year EU-International Monetary Fund accord requires Lisbon to adopt harsh austerity measures so as to restore its public finances, bringing its budget deficit down to the EU limit of 3% of GDP in 2013.

The deficit was equal to 9.1% of Gross Domestic Product last year.

Finance Minister Fernando Teixeira dos Santos said on Tuesday that Portugal expected to pay an average interest rate of 5.1% on the €78bn bailout funds.

A first instalment of €18bn was expected by the end of May or beginning of June, he added.

European finance ministers on Monday backed the debt rescue on condition Lisbon embarks on a major privatisation programme.

Portugal was the third struggling eurozone country to need a bailout after Greece and Ireland last year.