Exclusive: Portugal hopes bailout in place for June needs

LISBON (Reuters) – Portugal’s caretaker government hopes that the country’s bailout will be finalized and approved in mid-May, in time to cover financing needs from June onwards, Finance Minister Fernando Teixeira dos Santos said on Tuesday.

“We are covered until June. But in June we will be needing the activation of this program,” Teixeira dos Santos told Reuters in an interview.

Portugal has a major bond redemption of 4.9 billion euros on June 15.

The minister said a bond redemption of about 4.2 billion euros on April 15 is secured, as is financing for May.

“We expect to finalize the program until mid-May, we expect that at the May 16 Eurogroup meeting we can approve the program and also the financial assistance that we have requested,” he said.

Officials from the European Commission, the European Central Bank and the International Monetary Fund started their work in Lisbon to go over the country’s accounts on Tuesday.

The minister said it was “premature” to talk about the full value of the loan but that the European Commission had made an estimate of 80 billion euros. “It may rise (above that level) or all of that may not be necessary. It will be about that.”

Teixeira dos Santos said it was key that the country and all political parties commit themselves to the loan program before a snap general election on June 5.

“We face a situation where we need a commitment by the whole country,” he said. “Obviously it is not enough for just the government to make the commitment, as such we need a commitment by the country, including other political parties.”

He said the basis for negotiations on the bailout with the EU and the IMF officials would be the government’s austerity plans which were presented to parliament but rejected in March.

Considering that Portugal’s financial situation has deteriorated since the rejection, the austerity plan could be “tougher”, he said.

The rejection in parliament of the budget plans prompted the government’s resignation. It will lead the negotiations for the bailout in its caretaker capacity, the minister said. (Reporting by Axel Bugge and Sergio Goncalves; Editing by Andrei Khalip)

Exclusive: Portugal hopes bailout in place for June needs