Portugal significantly exceeded its savings target for 2011, by reducing its budget deficit to 4.2 per cent, the national statistics agency INE announced Friday according to dpa. The debt-ridden eurozone member had promised its international creditors it would reduce its deficit to a maximum 5.9 per cent of gross domestic product (GDP) last year. The 2011 figure was even below the current year's target of 4.5 per cent. In 2010, Portugal's deficit lay at 9.8 per cent, before the country became a recipient of international bailout funds in April 2011. However, the deficit cuts were only made possible by one-off payouts totalling 6 billion euros (8 billion dollars) from the pension funds of Portugal's four largest banks. These payments accounted for 3.5 per cent of the deficit, state news agency Lusa reported. In return, the Portuguese state will be required to finance bankers' pensions in future. The government had previously anticipated a 2011 deficit of 4 per cent. Portugal is the third eurozone country to have received a bailout from the European Union and the International Monetary Fund, following Greece and Ireland. In return, Lisbon pledged to implement strict austerity measures, with the aim of shrinking its deficit below the EU's 3-per-cent threshold as early as 2013.
