IMF approves $36.8B loan for Portugal

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WASHINGTON, May 21 (UPI) -- The International Monetary Fund said Saturday it has approved its share of a $110 billion rescue package for Portugal.

The IMF approved a $36.8 billion loan to help Portugal find some financial "breathing space from borrowing in the markets, while it demonstrates implementation of the policy steps needed to get the economy back on track," the IMF said in a statement.

Interim Managing Director John Lipsky said, "The Portuguese authorities have put forward a program that is economically well-balanced and has growth and job creation at its center," RIA Novosti reported.

"It addresses the fundamental problem in Portugal -- low growth -- with a policy mix based on restoring competitiveness through structural reforms, ensuring a balanced fiscal consolidation path, and stabilizing the financial sector," Lipsky said.

Portugal has proposed a program that includes raising taxes, slashing government spending and selling some government assets. It has also agreed to labor and justice reforms, RIA Novosti reported.

The rest of the $110 billion package is to come from the European Union.