LISBON (Reuters) - Restructuring Portugal’s debt load is not a solution for the country and the only way to overcome the current crisis is to pay it off, Finance Minister Maria Luis Albuquerque said on Wednesday.
“Restructuring debt would not resolve any problem,” Albuquerque told a parliamentary committee. “It is naturally a possible alternative but we have the profound conviction that it would bring much more suffering to the Portuguese.”
One of the key goals of Portugal’s bailout from the European Union and IMF is to reduce the country’s debt goal. Still, since Portugal sought its bailout in 2011, the total debt burden has continued to rise.
The government’s 2014 draft budget sees total debt peaking at 127.8 percent of gross domestic product this year and then falling to 126.7 percent next year.
“Our debt is there and it has to be paid,” said Albuquerque. “The size of our debt is what makes our budget adjustment more difficult and painful. Past debts limit all our options.”
Portugal is set to exit its bailout in mid-2014 and needs to return to financing itself in debt markets as of then.
Economy Minister Antonio Pires de Lima said this week Portugal is seeking to negotiate a precautionary credit line from creditors early next year.
Reporting By Axel Bugge and Daniel Alvarenga; editing by Patrick Graham