Daily Archives: April 11, 2013

Prime minister Pedro Passos Coelho addresses the nation Sunday on Portugal's faltering bailout.

Although Cyprus has pushed its way back into the news, the main event at Friday’s meeting of eurozone finance ministers in Dublin is expected to be a decision on whether to give Ireland and Portugal more time to pay off their EU bailout loans.

We at Brussels Blog got our hands on the 12-page options paper prepared for the ministers by the so-called “troika” of international lenders – European Commission, European Central Bank and International Monetary Fund – and staff of the eurozone’s €440bn bailout fund, and have posted it here. The document contains five different options: extend the payment schedule a few months; by 2.5 years; 5 years; 10 years or more; or a compromise of 7 years.

As we reported earlier in the week, the debate is now centred on the document’s recommended option, the 7-year extension plan, though there are still reservations in Berlin about moving forward.

Beyond the options themselves, however, the document contains a very revealing analysis on the state of Portugal’s €78bn bailout, which has recently suffered some setbacks. As one official who will participate in Friday’s meeting put it, the topic of Portugal will be “more exciting than would have been a week ago”.

Although the document doesn’t address it directly, it makes clear that Portugal will have a very hard time avoiding a second bailout, since its financing needs in 2014 and 2015 – its first years after bailout funding runs out in July 2014 – will be substantially higher than they were during the pre-crisis period. Read more