Troika concerned Portugal will be unable to meet conditions

By CHRIS GRAEME [email protected]

Certain members of the ‘Troika’ are concerned that Portugal will prove unable to meet the conditions of a €78 billion bailout package.

The ‘Troika’ made up of officials from the International Monetary Fund (IMF), the European Commission (EC) and European Central Bank (ECB) fear that the deadlines Portugal has been given to meet sweeping structural changes and repayment on the loan may be unrealistic.

They also believe that the technical studies necessary in order to help the next government carry out reforms haven’t been undertaken.

According to sources contacted by the SIC TV channel, the concerns are that the situation is “very urgent” and that the parties likely to form a coalition government after Sunday’s election (June 5) should already have appointed a High Commissioner to work alongside the various ministries in preparing technical studies on how to apply the programme signed earlier this month with the Troika representatives in Lisbon.

This idea has been argued by a high up member of the ‘Troika’ who took part in the negotiations with the EU Commission and IMF.

The aim is that specialists from the various ministries involved should already be working on the framework so that the new government can immediately start implementing reforms.

Future proposals for the new government’s measures to change the Sole Social Tax (Taxa Social Única) – the national insurance contributions companies pay towards their employees’ social security – the Employment Code (Código Laboral) and the financial situation of public companies have to be ready by the end of July.

The deadlines were brought up in Brussels at a meeting of the EU finance ministers and reveal fundamental differences between the first text of the agreement signed by the Government and accepted by the PSD and CDS-PP parties at the beginning of May, and the second text of the agreement, signed in Brussels on May 17.

The well-known source told SIC TV that the timetable for implementing the measures had been deliberately shortened.

The reason being is that various north European governments (likely to include Germany) in the EU want to “accelerate the pace of reforms for Portugal” so they can justify the bailout to their own parliaments.

Officially, the European Union and caretaker government in Portugal claim that the differences in the texts are “insignificant” but in practice have an undeniable consequence: the measures have to be presented much sooner which will not give the new government time to study them in detail.

The President of the Audit Exchequer said over the weekend that Portugal would be able to meet the Troika plan as agreed if there was a concerted effort from all parties involved.

Guilherme d’Oliveira Martins told the newspaper Económico that Portugal had “all the necessary conditions to be able to fulfil the plan but that all sides had to show willingness.”

Speaking at the 7th Eurosai Congress – European Supreme Audit Institutions Congress – which was chaired by Martins, he affirmed that his organisation was prepared to “follow up and see through the commitments agreed in the document” such as the matter to do with competition and public contracts.

“We can’t have people dealing with public money who are not made responsible, accountable and subject to jurisdiction,” he said.

In the congress, which lasted until June 2 and involved 47 European countries, the challenges and responsibilities of public managers were discussed at length.