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18 May 2014

Portugal successfully exits EFSF programme

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The EFSF financial assistance programme for Portugal officially ended with a successful programme exit. This follows the disbursement of €26 billion by the EFSF over three years to support macroeconomic adjustment in Portugal.

Klaus Regling, the CEO of the EFSF said: "The government and people of Portugal deserve recognition for their achievements in the last three years. Fiscal measures and structural adjustment have enabled Portugal to improve competitiveness, restore sustainable growth and regain the trust of investors. It should be stressed, however, that Portugal still faces serious challenges. Continued efforts are needed to overcome the persistently high levels of public and private debt, to ensure fiscal sustainability and to tackle the currently high unemployment levels."

The EFSF, EFSM (an EU facility funded through bonds issued by the European Commission) and IMF each contributed €26 billion to the overall financial assistance package of €78 billion agreed by ECOFIN and the Eurogroup in May 2011. The first disbursement of EFSF financial assistance was made in June 2011 and the final 12th instalment was transferred on 28 April 2014. The loans were granted at interest rates slightly above the EFSF’s cost of funding, with a weighted average maturity of nearly 21 years.

The ESM will continue to cooperate with the Portuguese authorities under the ESM’s Early Warning System, which also applies to EFSF programmes and is designed to ensure beneficiary countries will be able to honour their debts in a timely manner. In order to avoid an additional reporting burden for Portugal, the ESM will join the European Commission twice a year for its post-programme surveillance.

Press release

Further information

Vice President of the European Commission, Siim Kallas, commented on Portugal: "Thanks to the determined efforts of the Portuguese authorities and the resilience and courage of the Portuguese people, major progress has been made in addressing the economic imbalances that have been weighing the country down for many years.

Decisive action was taken by the Portuguese government to put public finances back on a sustainable trajectory. The financial sector has been stabilised and strengthened. Structural reforms in many sectors of the economy have begun to lift Portugal's competitiveness and remove obstacles to investment and job creation.

After Ireland and Spain, Portugal is the third euro area country to successfully graduate from its financial assistance programme. While this is a cause for celebration, there is no cause for complacency. To deliver a more robust recovery and bring down the still unacceptably high level of unemployment, it will be essential to maintain an unwavering commitment to sound budgetary policies and growth-enhancing reforms in the months and years ahead.

The European Commission has stood by Portugal throughout the crisis. We will continue to support and encourage Portugal's ongoing efforts to build a more solid economic basis for the future of its citizens."

Full statement

© EFSF - European Financial Stability Facility

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