LISBON – Bailed-out eurozone state Portugal will hold a fresh round of talks with its international creditors this week amid persistent concerns that it needs even more help to balance its strained public finances.
Officials from the 'troika' of the European Union, European Central Bank and the International Monetary Fund begin Wednesday a two-week review of the economy, checking Portugal's progress since a 78 billion euro (US$103 billion) bailout in 2011.
Having got through two previous rounds, Lisbon now waits to find out if it will get the next tranche of aid worth 14.9 billion euros as the pressure mounts on the government from popular unease.
On Saturday, hundreds of thousands protested against austerity measures adopted under the May 2011 bailout, carrying banners such as "The struggle continues" and "No to exploitation, no to inequality, no to impoverishment."
The CGTP union which called the march estimated 300,000 people took part, while police would not give any figures, in line with their usual practice.
"We are convinced that it is one of the biggest demonstrations in the last 30 years," said Armenio Carlos, general secretary of the CGTP, in a speech at the end of the protest in the landmark Praca do Comercio (Commerce Square).
He called the bailout conditions "a programme of aggression against workers and against the national interest.
"Austerity does not create wealth. The country needs the rope around its neck to be removed so that it can breathe, live and work," he said.
So far the centre-right government of Pedro Passo Ceolho has made some progress in the face of unemployment rising to 13 per cent and an economy which is expected to shrink 3.0 per cent this year.
"The troika ought to take the initiative and adjust (the programme)," said former finance minister Eduardo Catroga who helped negotiate the 2011 bailout.
"The troika was working (then) on a certain number of hypotheses which they should look at again," he said.
Financial analysts estimate the country could need up to another 50 billion euros to get it through the next few years.
"We are expecting ... additional funds for Portugal of between 30 and 50 billion euros through to 2014," Goldman Sachs said in a recent note.
Portugal, like many weaker eurozone members such as neighbour Spain and Italy, has found it hard to raise fresh funds on the financial markets in recent months although the pressure has eased in recent weeks.
It remains the case, however, that its finances are stretched, driving speculation it might need additional help.
Prime Minister Passos Coelho insists that Portugal will stick to its commitments but recent comments by Germany, Europe's powerhouse economy and main provider of bailout funds, suggested that something new was in the works.
An exchange between Portuguese Finance Minister Vitor Gaspar and his German counterpart, filmed unknown to them, appeared to show them ready to discuss adjustments to the current bailout.
Despite such speculation, this week's meetings are to focus on a review of the economic reforms so far adopted in transport, energy, property, the labour market and the judicial system. AFP