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Portugal's deficit for 2014 rises from that of previously reported

Xinhua, September 24, 2015 Adjust font size:

Portugal's public deficit for 2014 has risen to 7.2 percent from the 4.5 percent previously reported, after failing to recover a loan it made to Novo Banco, national statistics revealed on Wednesday in the run up to the general elections on Oct. 4.

The Portuguese government gave Novo Banco, the bank that was created in the bailout of BES in August last year, 4.9 billion euros (5.5 billion U.S. dollars) but had to suspend its sale earlier this month due to difficulties finding a buyer.

The bad news regarding the deficit led Socialist Party member of parliament Pedro Nuno Santos to accuse Prime Minister Pedro Passos Coelho on Wednesday of failing to reach his targets and suggesting that austerity imposed in the past few years hadn't been effective.

"They hid the BES problem while it was in their interest to guarantee a clean exit, and they hid what would happen after a clean exit from the resolution," Nuno Santos said during an election campaign, according to local media.

However, Passos Coelho brushed off his remarks and claimed on Wednesday that the government could still aim for a deficit below 3.0 percent this year and that the impact of bank Novo Banco on the deficit was merely "statistical accounting", according to local media reports. Endit