The International Monetary Fund has received a financial aid assistance request from Portugal and will work on a bailout plan with European Union authorities, Managing Director Dominique Strauss-Kahn said.
“We are prepared to move expeditiously on this request and hold swift discussions with the Portuguese government, together with the European Commission and the European Central Bank, on an economic program, supported by the main political parties, that could provide the basis for fund financial assistance,” Strauss-Kahn said in a statement released in Washington today.
Portugal’s bid for emergency aid package, estimated at 80 billion euros ($115 billion), opens what European leaders say will be the final chapter in the debt crisis that erupted in Greece last year, spread to Ireland and triggered speculation that the 17-nation euro area might not survive in its current form.
The IMF has been providing part of the funding for Greece and Ireland as well. Strauss-Kahn said the institution welcomed a statement from European officials today “indicating preparations will start immediately to reach agreement on a program that will help Portugal meet the economic challenges it is facing.”
EU Economic and Monetary Affairs Commissioner Olli Rehn today said Portugal’s aid program will likely amount to about 80 billion euros ($115 billion) after the country became the third euro-region nation to seek a bailout, while he called the estimate “very, very preliminary.”
He said Portugal’s loans would be “most likely” for three years, shorter than the 7 1/2-year maturities on joint EU-IMF packages of 110 billion euros for Greece and 67.5 billion euros for Ireland.
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