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Last updated at 16:04 BST, Wednesday, 04 May 2011

Portugal reaches financial aid deal

Summary

5 May 2011

Portugal's caretaker prime minister Jose Socrates says he has reached agreement on a financial aid deal with the EU and the International Monetary Fund. The plan includes cuts in government spending as well as selling off state-owned assets.

Reporter:
Alison Roberts

People hold a banner saying "IMF hunger, misery, injustice", during a demonstration in Lisbon, Portugal

Portuguese opinion is split over the bail out

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In a statement with distinctly political overtones, no doubt with next month's general election in mind, the prime minister on Tuesday night focused more on what is not included in the €78 billion package than what is.

There will, he assured the Portuguese people he was addressing in a live television broadcast, be no more cuts in public sector salaries, no abolition of holiday and Christmas bonuses, and no freeze in the lowest pensions - some of which in Portugal, are well below €300 a month.

Essentially, Mr Socrates stressed, the plan coincides with the austerity package parliament rejected last month, leading to the minority Socialist government's resignation, but is more far-reaching in some areas and calls for rigorous analysis and monitoring of progress. And, he said, it also includes some labour market reforms that he did not detail.

More information, and less politics, is expected from IMF and EU officials on Wednesday. Portugal's right-of-centre opposition parties, which have been consulted by the visiting officials during the past two weeks, had said they backed the bailout bid in principle.

Alison Roberts, BBC News, Lisbon

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Vocabulary

overtones

suggested qualities or characteristics, which are not displayed openly

abolition

official ending or stopping

well below

here, a number much less than

austerity package

government policy to save money, including large spending cuts

far-reaching

affecting something greatly, in many ways

rigorous

thorough and detailed

labour market

all the people who want to work at a particular time, and the number of jobs available for them

detail

explain or specify

right-of-centre

political view which is slightly conservative or right-wing

backed

supported

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