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Plan for Portugal needed before May 16: PM

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Plan for Portugal needed before May 16: PM

Jose Socrates - Photo EU Council

(LISBON) - A bailout plan for Portugal should be drafted by mid-May to present to eurozone finance ministers, with negotiations to be quick but discreet, outgoing Prime Minister Jose Socrates said on Thursday.

Officials from the "troika" of the European Central Bank, European Union and International Monetary Fund are currently in Lisbon negotiating the terms of financial rescue package expected to total nearly 80 billion euros ($118 billion).

"We must make an effort to have an agreement between the Portuguese authorities and the troika to submit it to the Ecofin on May 16. That is very important so European institutions can review the programme," Socrates said on private radio station TSF.

"The negotiations should be rapid but discreet," he said when asked about the talks, adding that the Portuguese government would do its best to make sure the programme would have as little social impact as possible.

However the head of the Eurogroup of finance minister, Jean-Claude Juncker, called that too short a deadline as there is currently only a caretaker government in Finland following elections which saw an anti-EU party leap into third place.

"Mid-May seems to me too short not due to the plan itself but due to the real difficulty of getting a legitimate Finnish decision," the Luxembourg prime minister said during a visit to Paris.

Finland's new parliament convened on Thursday for the first time since April 17 elections that dramatically shifted the balance of the house by catapulting the anti-EU True Finns into third place and there are a large number of lawmakers hostile to approving a bailout for Portugal.

The IMF also refused to be draw on a deadline for a deal.

"Negotiations are ongoing and will continue as long as needed," spokesman David Hawley said at a news briefing at the IMF headquarters in Washington.

Portugal was forced to ask for a bailout last month after Socrates' government resigned following a parliamentary dispute and rejection of a fourth round of austerity measures.

Socrates declined to confirm any of the speculation in the media about the specifics of the bailout package, but with elections due at the beginning of June, said the country will regret the opposition's blocking of his government's austerity programme.

Investors have been steadily asking for higher rates of return to lend money to Portugal, which has to roll over billions in maturing debt this year and still has a persistent budget deficit.

Lisbon has to have the bailout package in place by June 15 when it has to repay nearly 5.0 billion euros ($7.3 billion) in maturing debt.

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