Portugal reaches €78 billion bailout deal with EU and IMF

Portugal reached a €78 billion bailout deal with the EU and IMF late last night, an agreement that marks the euro zone's third sovereign rescue after Ireland and Greece.

In a televised address from his official residence in Lisbon, caretaker prime minister José Sócrates said the pact with the EU Commission, the European Central and the IMF will protect the country's interests, Irish Times reports.

Acting prime minister José Sócrates said that, under the terms of the deal, Portugal must slash its budget deficit from 9.1% to 5.9% this year, and then reduce it to 3% by 2013.

"The government has today reached an agreement with the international institutions regarding the financial aid to our country," Sócrates said in a televised address.

"Naturally, there are no financial assistance programs that are not demanding," he added. "The times we live in continue to imply efforts and a lot of work. Let no one doubt that," according to The Guardian.

Portugal is the third member of the 17-nation eurozone, after Greece and Ireland, to need a bailout due to crippling debts. One of western Europe's poorest countries, Portugal had said it will run out of money next month.

Mr Socrates, who quit last month but is still running the country ahead of a June 5 election, said Portugal won a favourable agreement after more than two weeks of negotiations with the International Monetary Fund, the European Central Bank and the European Commission, Belfast Telegraph says.