PORTUGAL:THE EUROPEAN Union and the International Monetary Fund pledged to do "whatever it takes to support Portugal, Greece and Ireland until they were able to return to debt markets, provided they complied with their bailout programmes.

The guarantee was given by officials of the so-called “troika” – the EU, IMF and European Central Bank – as they completed their first quarterly review of Portugal’s €78 billion rescue package.

The delegation said Portugal was on track to meet its commitments under the three-year adjustment programme after the government announced additional austerity measures to compensate for a budget shortfall equivalent to 1.1 per cent of gross domestic product.

Poul Thomsen, head of the IMF mission to Portugal, said the commitment by the EU and IMF to do whatever it takes to support the three countries “even if the headwinds are stronger than expected” had fundamentally improved their economic outlook and eliminated uncertainties over the medium term.

He said European leaders were “moving swiftly” to put in place reforms to the European Financial Stability Facility, after agreeing in July to expand the euro zone bailout fund and give it greater powers to intervene in financial markets.

Analysts estimate the rate Portugal pays for its bailout funds will drop by about two percentage points to about 3.5 per cent as a result of the measures agreed by EU leaders in July. – Copyright The Financial Times Limited 2011