Portuguese Finance Minister Vitor Gaspar (pictured above) announced Friday that his country had been given more time to come to grips with its public deficit. He said international lenders had granted Lisbon an extra year to meet targets in line with EU rules.

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"The new deficit limits are 5.5 percent in 2013, 4 percent in 2014 and 2.5 percent in 2015," Gaspar told reporters as he presented the conclusions of a seventh quarterly review of reforms Portugal needed to implement in return for foreign financial aid.

Gaspar said the country's 2012 deficit was much higher than expected, because the EU statistics body Eurostat had not allowed Portugal to include in its annual budget initial income from the privatization of the airport management company ANA. The minister warned last year's deficit might turn out to be as high as 6.6 percent of GDP.

Tough road ahead

Originally, the government had agreed to bring its deficit below three percent of gross domestic product (GDP) as early as 2014, but the protracted economic crisis has taken a far higher toll on the country's economy than previously expected.

The European Union, the International Monetary Fund (IMF) and the European Central Bank (ECB) cleared the way for Portugal to receive its next tranche of bailout funds worth 2 billion euros ($2.6 billion).

In return, the Southern European nation had to agree to sustainable spending cuts of some 4 billion euros or 2.5 percent of GDP by 2015.

hg/slk (AFP, Reuters, dpa)