Portugal May Begin EU Bailout Repayments This Summer: Publico

(Bloomberg) -- Portugal may begin repaying its European bailout loans before the end of the summer as it aims to save on interest costs, Finance Minister Mario Centeno said in an interview with Publico.

The initial early repayment may be about 2 billion euros ($2.2 billion), the minister said, according to the newspaper.

Portugal had already said it might start repaying the loans this year after lower borrowing costs allowed it to pay back its debt to the International Monetary Fund in 2018 ahead of schedule. The European Stability Mechanism, the euro-area bailout fund, said on Dec. 4 that Portugal had committed to the early repayment to the European Financial Stability Facility of as much as 2 billion euros in the 2020-23 period, subject to market conditions and the impact on debt sustainability.

Portugal’s 10-year bond yield was at 0.4% on Friday, down from about 1.8% six months ago. It peaked at 18% in 2012 at the height of the euro region’s debt crisis.

• Centeno also told Publico that now is not the moment to take a decision on whether he would serve a second term as finance minister. A general election is scheduled for Oct. 6.
• The Portuguese economy’s growth potential can be reinforced, Centeno said in the interview.

To contact the reporter on this story: Joao Lima in Lisbon at jlima1@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Andrew Davis, James Amott

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