Portugal is on track to receive a fourth round of foreign bailout money, after a review showed that Lisbon has managed to abide by the tough austerity terms agreed under its 78 billion euros ($98 billion) EU - IMF led bailout package.

In a statement released yesterday, the troika - the European Commission, the European Central Bank and the International Monetary Fund - said that despite the challenges, Portugal's reform policies have been implemented according to plan with external adjustment proceeding faster than expected.

Portugal welcomed the positive assessment, which ensures its continuing financial support from the troika, as evidence that the austerity formula is working.

Passing the fourth assessment from bailout inspectors would clear the way for the Portuguese government to get the next 4.1 billion euros tranche of rescue loans. Under the bailout terms agreed last May, Portugal is to get 78 billion euros in total from the troika.
Speaking at a press conference yesterday, the country's finance minister Vitor Gaspar promised to press ahead with structural reforms and privatisations.

He said: "There are considerable internal and external risks. The only certainty we have is that we need to focus on meeting the targets of the programme."
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The country has won high praise for sticking to austerity pledges through thick and thin, without provoking popular revolt.
"We met our objectives," said Gaspar. "Our budget remains in line with our 2012 targets and the government should be able to bring the deficit down to 4.5pc of GDP as planned."

Three leading Portuguese banks also said yesterday they would draw on funding from the bailout to meet tougher capital requirements drawn up by the European Banking Authority.

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Gaspar added the finance ministry is already planning to inject more than 6.6 billion euros into the three banks to help them meet the new liquidity standards.

Despite a steep recession and having the third highest unemployment rate in the eurozone, Portugal's coalition government has been quick to impose deep cuts to public sector wages and raise taxes to reduce its budget deficit.

Last month, it took austerity measures to a new level with the decision to scrap four of its 14 public holidays.

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