The €78bn (£69bn) bail-out package will push Portugal into recession for at least two years and cause substantial economic and social upheaval, the beleaguered country's finance minister has warned. Teixeira dos Santos said that the financial conditions and budget constraints imposed by the European Union (EU) and the International Monetary Fund (IMF) in exchange for the rescue package are likely to cause Portugal's economy to contract by 2pc this year and a further 2pc in 2012.
Mr dos Santos, who is the caretaker finance minister, told a press conference on Thursday: "This program requires deep reforms and profound changes for our country."
He admitted that the package would require a painful overhaul of Portugal's public sector and a sell-off of state-owned stakes in key companies. Portuguese unemployment is expected to rise from 11pc to 13pc in 2013.
But he added that the process would help introduce vital structural reforms that would make Portugal stronger going forward.
In a joint statement regarding the bail-out, the EU and IMF said: "This programme's success will require a truly national effort." (read more)
