Portugal passes test to get more bailout funds

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Associated Press

Posted on November 19, 2012 at 2:02 PM

Updated Monday, Nov 19 at 2:06 PM

LISBON, Portugal (AP) — Portugal has passed the latest test of its compliance with the terms of its €78 billion ($100 billion) bailout, meaning it qualifies to get the next installment of its rescue loans.

Finance Minister Vitor Gaspar said Monday that creditors endorsed Portugal's progress on spending cuts and economic reforms.

Eurozone authorities are keen for Portugal's recovery program to stay on track and avoid creating another trouble spot in the bloc's protracted debt crisis.

But the government is under heavy pressure from opposition parties, trade unions and business leaders to change course amid signs that austerity is choking the economy.

The government predicts economic contraction of 1 percent in 2013 for a third straight year of recession. The jobless rate, currently at 15.7 percent, is seen climbing to a record 16.4 percent.

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