Portugal retakes control of its finances, freeing itself from EU oversight

On Saturday, Portugal freed itself from the austerity of oversight imposed by the EU and IMF as part of its bailout package. Portugal will still face some oversight until 2035, when 75 percent of its loan will be paid back.

Francisco Seco/AP
A fishmonger checks sales as she waits for customers at Lisbon's Ribeira market May 15. A thousand days on from its near-economic collapse, Portugal is ready to stand on its own again. On Saturday, after an internationally-mandated makeover, Portugal will become the second euro country, after Ireland, to officially shake off its bailout shackles.

Portugal is emerging from the painful economic constraints imposed by a three-year bailout that saved the country from collapse, but EU officials are warning that tough controls must continue to create stable employment.

With the government taking control of its finances once again, Portugal on Saturday became the second eurozone country after Ireland to free itself from the austerity and oversight imposed by its European partners and the International Monetary Fund as part of the $107 billion bailout.

But European Commission Vice President Siim Kallas in Brussels it was essential to keep an "unwavering commitment to sound budgetary policies and growth-enhancing reforms."

The Cabinet officially took back control of the economy at a meeting in Lisbon and presented its strategy for "medium-term reforms."

"We want everyone to know that we're not going to stop," said Carlos Moedas, assistant secretary of state to the prime minister and the Portuguese official responsible for overseeing the implementation of the bailout.

He said the government was determined to maintain a "reformist impulse."

As with Greece and Ireland, Portugal's rescue came at a price of cutting spending sharply and implementing unpopular measures that stripped away cherished welfare and labor entitlements.

In the streets, many people interviewed Saturday by Jornal de Noticias television said the pain of the harsh austerity measures had not ended.

And although many felt it was good for the government to be in control of its own finances again, EC and IMF oversight officials are still due to return to review the health of Portugal's economy twice a year until 2035, when 75 percent of the loan will be paid back, according to President Anibal Cavaco Silva.

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