Portugal Prime Minister states deficit falling, no aid needed (Reuters) (11-01-2011)

LISBON (Reuters) – In an attempt to stop speculation of the need for aid for his country, Portuguese Prime Minister Jose Socrates stated there are no such plans and that the 2010 budget gap was lower than its goal.

He cited preliminary data as showing the budget deficit ended 2010 below the target of 7.3 percent of gross domestic product promised to Brussels, meaning that the country cut its deficit by more than 2 percentage points from 2009's highs of 9.3 percent.

Portugal is seen by economists as the country most likely to follow Greece and Ireland in seeking international support in a widening euro zone debt crisis.

Central bank board member, Teodora Cardoso, was quoted as saying on Monday that Lisbon would do better to seek international financing, breaking ranks with political leaders.

Socrates said the country would keep financing itself in markets and was confident about Wednesday's bond offering of up to 1.25 billion euros.

This year's target is even more ambitious as the government plans to slash the deficit to 4.6 percent of GDP after adopting a range of painful austerity measures such as wage cuts for civil servants and higher taxes.

Source: Reuters