Portugal needs no more loans, says PM Passos Coelho

Portuguese PM Pedro Passos Coelho Image copyright AP

Portugal's prime minister has said the country will exit its three-year 78bn euros (£64bn) bailout on 17 May without needing a standby line of credit.

The loan had been granted in May 2011 by the European Union and the International Monetary Fund.

Since then Portugal has stuck to the tough measures required by the bailout.

"The government had decided to exit the assistance programme without turning to any kind of precautionary programme," Pedro Passos Coelho said on TV.

The decision was the "best for the interests of Portugal" after the country "regained its credibility," he added.

The announcement was made after a meeting of the cabinet.

Bond sale

Portugal's economy is recovering from its worst downturn since the 1970s.

In April there was a sign of investor confidence in the country's economy, when yields on its 10-year government debt fell to an eight-year low of 3.58% at a bond auction.

Investor interest in the 750m euro (£617m) bond auction was such that it was three times over-subscribed.

The yield on 10-year bonds had stood at 5.1% in February.

The "clean exit" route was also undertaken by the Republic of Ireland in December, when it became the first eurozone nation to exit a bailout.

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