Euro area, EU and IMF financial support is provided on the basis of an agreement on an economic adjustment programme which has been negotiated in May 2011 between the Portuguese authorities and officials from the European Commission (EC), the International Monetary Fund (IMF) and the European Central Bank (ECB)

Portugal requested financial assistance on 7 April. The programme for the period 2011-2014 – formally endorsed by the Commission on 10 May – contains measures to promote growth and jobs, fiscal measures to reduce the public debt and deficit, and measures to ensure the stability of the country’s financial sector. The agreement has been finally adopted on 17 May at the Eurogroup/ECOFIN meeting in Brussels.The Memorandum of Understanding and the Loan Agreement have been signed thereafter.

Facts and figures on the programme for Portugal

Objectives:

The aid will be provided on the basis of a three-year policy programme for the period 2011 to mid-2014.

The economic and financial adjustment programme includes:

• structural reforms to boost potential growth, create jobs, and improve competitiveness;
• a fiscal consolidation strategy, supported by structural fiscal measures and better fiscal control over public-private-partnerships and state-owned enterprises, aimed at putting the gross public debt-to-GDP ratio on a firm downward path in the medium term and reducing the deficit below 3 % of GDP by 2013;
• a financial sector strategy based on recapitalisation and deleveraging, with efforts to safeguard the financial sector against disorderly deleveraging through market based mechanisms supported by backstop facilities.

Financial package:

The total (during 3 years) of up to EUR 78 billion of the financial package is financed as follows:

• EUR 26 billion for each of
  
  • EFSM (until May 2012: EUR 20.1 billion disbursed)
  • EFSF (until March 2012: EUR 9.6 billion disbursed)
  • IMF (until April 2012: EUR 18.6 billion disbursed)

Programme disbursements will be made over 3 years, under EFSM with an average maximum maturity of 12.5 years.

EFSM loan disbursements and funding plan 2012

Overview on EFSM loan disbursements to Portugal (Status: 16 April 2012)
Amount	Maturity	Raised on	Loan beneficiary	Disbursed on
€ 1.75 bn	10 yr	24 May 2011	Portugal	31 May 2011
€ 4.75 bn	5 yr	25 May 2011	Portugal	01 June 2011
€ 5.0 bn	10 yr	14 Sept 2011	Portugal	21 Sept 2011
€ 2.0 bn	15 yr	22 Sept 2011	Portugal	29 Sept 2011
€ 0.6 bn	7 yr	29 Sept 2011	Portugal	06 Oct 2011
€ 1.5 bn	30 yr	09 Jan 2012	Portugal	16 Jan 2012
€ 1.8 bn	26 yr	17 Mar 2012	Portugal	24 Apr 2012
€ 2.7 bn	10 yr	26 Apr 2012	Portugal	04 May 2012

Complementary disbursements have been made by the EFSF and the IMF.

Disbursements envisaged over the rest of the year will be subject to Portugal's requirements and to quarterly reviews by the Commission in cooperation with the IMF and in liaison with the European Central Bank (ECB).

In 2012, the EU, through the EFSM, intends to raise the total amount of EUR 12.5 billion, to be used for further loans to Ireland and Portugal. After  four bond issuances (EUR 3 billion placed on 9 January, EUR 3 billion on 27 February and EUR 1.8 billion on 17 April and EUR 2.7 billion on 26 April), EUR 2 billion of funding requirement remains this year for Ireland and Portugal. Further funding requirements will be financed by EFSF operations and by the IMF, as agreed in the respective EU/IMF programmes.

News articles and press releases

26/04/2012	Commission press release: EU € 2.7 billion 10-year bond for Portugal strongly oversubscribed
17/04/2012	Commission press release: EU places €1.8 billion 26-year bond for Portugal
28/02/2012	Statement by the EC, ECB, and IMF on the Third Review Mission to Portugal
09/01/2012	Commission MEMO/12/4: EU successfully issued long-term bond with 30y maturity, funding loans of € 3 bn for Ireland and Portugal
16/11/2011	Commission MEMO 11/793. Statement by the EC, ECB, and IMF on the Second Review Mission to Portugal
29/09/2011	Commission MEMO/11/656: EU concludes funding programme in September with €1.1 billion 7 year bond
22/09/2011	Commission MEMO/11/629: Strong demand for EU € 4 billion 15y bond in support of Ireland and Portugal
14/09/2011	Commission MEMO/11/602: Commission proposes better financial terms for EU loans to Ireland and Portugal
14/09/2011	EU issued € 5 billion 10y bond to finance loan for Portugal
13/09/2011	EU to issue new 10 year benchmark bond for Portugal this week
12/08/2011	Statement by the EC, ECB, and IMF on the First Review Mission to Portugal
25/05/2011	Commission MEMO/11/344: Second €4.75 billion bond issued this week to support EU´s assistance packages
19/05/2011	Commission MEMO/11/336: €4.75 billion bond issued for EU´s assistance packages to Ireland and Portugal
17/05/2011	Memorandum of Understanding on Specific Economic Policy Conditionality
17/05/2011	Council approves aid to Portugal, set out conditions
11/05/2011	Council Regulation (EU) No 407/2010 of 11 May 2010 establishing a European financial stabilisation mechanism (OJ L 118, 12.5.2010, p.1).
05/05/2011	Statement on Portugal by the European Commission and the International Monetary Fund (IMF)
06/04/2011	Portugal requests activation of the financial support mechanisms
08/04/2011	Statement on Portugal by the Eurogroup and ECOFIN Ministers

Programme reports

• The Economic Adjustment Programme for Portugal. Third review – Winter 2011/2012 (Occasional Papers 95, April 2012)
• The Economic Adjustment Programme for Portugal. Second review - Autumn 2011 (Occasional Papers 88, December 2011)
• The Economic Adjustment Programme for Portugal. First review - Summer 2011 (Occasional Papers 83, September 2011)
• The Economic Adjustment for Portugal (Occasional Papers 79, June 2011)