Published April 08, 2013
LISBON – Portugal's EU and IMF lenders will visit Lisbon following the rejection by the constitutional court of some austerity measures, to tackle uncertainty created by the ruling, the finance ministry said on Monday.
Spending cuts promised by the government to compensate for the rejected measures, and to be outlined to the lenders, are a pre-condition for the disbursement of the next bailout tranche worth 2 billion euros, a ministry spokeswoman said.
The dates of the visit are yet to be scheduled. IMF officials contacted by Reuters said they could not confirm any planned visit yet.
"The court decision created an uncertainty which justifies this visit in-between reviews, as do the spending cuts that the government promised to present by the end of April or beginning of May," the finance ministry spokeswoman said.
The lenders usually visit Portugal for quarterly reviews of the country's performance under the 78-billion euro bailout. The latest such visit was in March.
The government has promised to the lenders progressive spending cuts worth 4 billion euros in 2013-2015, but the depth of the cuts required already this year is now likely to change.
On Sunday, Prime Minister Pedro Passos Coelho reaffirmed Lisbon's commitments to its fiscal tightening goals under an EU/IMF bailout, promising to compensate for the court decision with spending cuts.
The government has promised to slash spending on education, healthcare, public companies and pensions to compensate for the rejection of austerity measures that would have reduced holiday bonuses and other public sector perks.
Fitch ratings agency said on Monday the court ruling "increases the risk that the 2013 fiscal target will be missed", but added that rising implementation risks are already reflected in its negative outlook on Portugal's BB+ rating, which it affirmed in November.
(Reporting By Sergio Goncalves, writing by Andrei Khalip)