Portugal passes new IMF rescue program review

The International Monetary Fund approved Wednesday the disbursement of 910 million euros ($1.24 billion) to Portugal after the country passed the 10th review of its bailout program. The disbursement took the country a step closer to the May 2014 end of the European Union-IMF rescue program, with the country's finances stabilizing. But the IMF urged the Portuguese government not to give in to pressure to increase public spending and to keep pushing ahead on structural reforms to its finances. "The Portuguese authorities' implementation of their Fund-supported program has been commendable," said IMF Deputy Managing Director Nemat Shafik in a statement. "It will be important to complete fiscal consolidation to put the public debt firmly on a downward path," Shafik said. The newest disbursement came as Lisbon looked toward the end of the three-year 78 billion euro EU-IMF rescue launched in May 2011. Including today's action, the IMF has disbursed 25.1 billion euros of its 26.87 billion euro financing for the eurozone member country. On Tuesday, the government demonstrated the progress it has made in restructuring its finances, successfully raising three billion euros in financing from the commercial debt market. It was a key test of whether the country can exit the EU-IMF bailout program cleanly three months from now. Even so, Shafik cautioned that the EU commitment to support the country until full access to market funding is regained, along with Lisbon itself sticking to the reform program, "is essential to help the country remain resilient to shocks and consolidate progress."