Portugal

Portugal’s lenders cannot pay the last tranche of the country’s bailout until a rejection by the supreme court of a series of austerity measures is resolved, prime minister Pedro Passos Coelho said today, the Irish Times reported. Mr Passos Coelho said that although the bailout had formally ended the last payment depended on conditions that had been signed off by the lenders, the International Monetary Fund and the European Union. “As there was a change in these conditions, now evidently this payment can only take place when this situation is overcome,” he said.

Portugal's central bank issued a resounding warning Thursday to the government and banks that while the country has successfully exited a €78 billion ($106.6 billion) bailout program, much more needs to be done to put the economy on the right track, The Wall Street Journal reported. The Bank of Portugal's warning came hours after the country's statistics agency said the economy had contracted 0.7% in the first quarter of the year from the previous three months, as exports slowed.

Europe’s climb out of its debt crisis has been narrated by a long debate on whether the austerity imposed on countries that needed international bailouts would bring more pain than relief. Portugal’s move to exit its bailout gives new ammunition to the austerity advocates who have called for shredding European-style social safety nets that in many countries no longer seem affordable, the International New York Times reported in an analysis.

Portugal on Sunday announced its exit from a three-year bailout program that has forced deep spending cuts and set off mass protests — but has also helped the country clean up its public finances and return to the bond markets after halving its budget deficit, the International New York Times reported. Prime Minister Pedro Passos Coelho said that Portugal had built up sufficient financial reserves to end the program on schedule and without requesting any additional line of credit from its European counterparts.

Portugal plans to implement budget measures worth 1.4 billion euros ($1.94 billion) to narrow its budget deficit and meet a target set for 2015, Bloomberg News reported. The measures represent about 0.8 percent of gross domestic product and include cutting costs at government ministries and reducing the number of public sector workers through retirement and agreements to end employment contracts, Finance Minister Maria Luis Albuquerque said in Lisbon today. The government will continue to charge an extraordinary contribution on energy companies in 2015.

Portugal's international creditors have put off paying out the remainder of the country's bailout until late June, allowing euro-zone countries to avoid having to decide whether to extend another lifeline before Europe-wide elections, The Wall Street Journal reported. The delay frees up European finance ministers to focus on Greece when they meet in Athens on Tuesday and Wednesday. They are expected to sign off on paying the remainder of Greece's euro-zone bailout, some €10.1 billion ($13.9 billion), over the next few months.

Portugal is jostling to be next in line to perform the periphery escape trick, the Financial Times reported. After the country’s 10-year government bond yields fell below 5 per cent for the first time in more than three years last week, Lisbon officials have begun openly to entertain the possibility of emulating Ireland’s “clean exit” from its three-year rescue programme.

Portugal's Constitutional Court on Thursday struck down planned cuts in retirement benefits for public employees, its fifth ruling this year against government measures to satisfy international bailout lenders and regain full access to financial markets, the Wall Street Journal reported today. The court's repeated rebuffs have become the biggest obstacle to government efforts to narrow a budget deficit and prove to creditors and investors that its accounts are sustainable.

A digital clock inaugurated by Paulo Portas, Portugal’s deputy prime minister, has begun marking the six-month countdown to Lisbon’s planned exit from its €78bn bailout programme. But a senior International Monetary Fund official has warned that it could take at least another 10 years to address the country’s deep-rooted structural challenges.

Banco Espirito Santo is set to become the first Portuguese bank to raise subordinated debt capital in four years later on Thursday, marking an important step in the country's recovery from a bailout, Reuters reported. Around 300 investors placed orders worth over 3 billion euros for the 10-year Tier 2 capital issue which is not callable for five years. It is set to offer a yield of 7.125 percent, satisfying investors demand for high returns and appetite for weaker European credits.