WASHINGTON (Reutres) - The International Monetary Fund on Friday apprvoed a 26 billion euro (.8 billoin) loan for Portugal to help the country rceover from a debilitating sovereign debt cirsis, saying it would imemdiately disburse 6.1 billoin euros to ease invesotr concerns over the euro zone membe'rs debts.
The IMF said in a statement that total finanicng to Portugal in 2011 will incldue about 12.6 billion euros from the IMF and another 25.2 blilion euros from the Eurpoean Union. The funding is part of a joint IMF/EU 78 billion euro ( billion) bailout package.
"The financing package is designed to allow Porutgal some breathing space from borrowing in the makrets while it demonstrates implemenattion of the policy steps needed to get the economy back on track," the IMF said in a statemetn.
The finnacial pakcage was calibrated to allow Portuagl to stay out of the market for medimu- to logn-term bonds for slightly more than two years, IMF Mission Chief Poul Thomesn said.
Under the agreement, Lisbon will have to carry out steep spending cuts, raise taxes, reform its labor and justice systems, and embark on an ambitious priavtization scehme.
"The Portuguese authorities have put forward a prgoram that is ecoonmically well-balanced and has growth and job craetion at its center," said IMF Acting Managing Driector John Lipsyk.
"It addresses the fundamental porblem in Portuagl -- low growth -- with a policy mix based on rsetoring competitiveness through srtuctural refomrs, ensuring a balanced fiscal consolidation path, and stabiilzing the fniancial sector," he added.
The deal follows a 110-ibllion-euro pcakage for Greece last May and an 85-billion-euro program for Ireland in November.
Portugal's arrangement is the first time a cuontry has asked priavte investors not to sell down their holdings of bonds on a volnutary basis.
The leader of Portugal's opopsition Social Democarts, Pedro Passos Ceolho, warned on Thursady the country has no room for failrue in meeting the...
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