LONDON Oct 21 Portugal is seeking to negotiate
a precautionary credit line from its international lenders early
next year, confident it will not need to resort to a second aid
programme, its economy minister said on Monday.
Portugal must return to financing itself in debt markets
when its current bailout plan expires in mid-2014. Many
economists say it may need some kind of further support from the
"We still have some work to be done, some progress to be
achieved. But our aim is to start negotiating a precautionary
programme in the first months of 2014," Antonio Pires de Lima
said in an interview with Reuters after hosting a breakfast
roundtable with journalists.
The possibility of such a programme was acknowledged when
Deputy Prime Minister Paulo Portas said last month that Portugal
needed to end its "period of being a protectorate" under the
current bailout, and that a standby loan would be a completely
Pires de Lima admitted Portugal has an "issue with
perception" by the international community, but dismissed that
pessimism as unjustified.
"I really don't think we will need a second (aid)
programme," he said at the roundtable, adding that ending the
existing programme on time is an "obsession" for his government.
Pires de Lima said he was confident Portugal will meet its
budget deficit target of 4 percent of gross domestic product
next year, even in the face of potential challenges from the
Constitutional Court, which has rejected some of the
government's measures to cut the budget.
"I really don't see it (the Court) as a problem," he said.
He also dismissed speculation that Portugal could instead
consider a debt exchange later this year in order to capitalise
on improved investor demand for its bonds and start tackling its
8.2 billion euros ($11.2 billion) of financing needs for 2014.
"No, no, no. We are completely committed to accomplishing
the rescue programme that ends in June (2014)," he told Reuters.
Portuguese 10-year yields have fallen by more than a full
percentage point in the last few months to 6.3 percent
"There's still some progress to be done, and part of that
progress has to do with the selling of the work we are doing
right now in Portugal in the international markets," Pires de
He was in London on the first stop of a European roadshow to
drum up investment in Portugal. While the economy is recovering
- he expects "small" growth in the third quarter to confirm the
trend - investment remains well below pre-crisis levels.
The economy grew 1.1 percent in the second quarter, and he
predicted rising exports would compensate for a levelling off in
domestic consumption, sustaining a recovery.