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UPDATE 2-EU denies report Portugal bailout terms almost ready

Published 04/27/2011, 02:58 PM

* Bailout seen around 80 bln euros

* EU, IMF officials currently in Lisbon

(Recasts with European Commission spokesman)

LISBON, April 27 (Reuters) - The European Commission poured cold water on Wednesday on a media report that EU and IMF terms for a bailout of Portugal would be ready and submitted to the caretaker government by the end of the week.

Portugal's Expresso weekly, which did not cite any sources, reported on its website that a mission of officials from the European Union and International Monetary Fund visiting Lisbon had "practically finished" work on the package and wanted the government and opposition parties to approve the terms by May 4.

"This is simply not true. Discussions are still going on and nothing is concluded until everything is wrapped up," said European Commission spokesman Amadeu Altafaj. He did not provide any estimates on when a deal may be ready.

An IMF spokeswoman said she would not comment on speculation. Portuguese government officials had no immediate comment either.

Portugal this month became the third euro zone country to seek foreign aid, following Greece and Ireland, after the minority government collapsed in March, sending the heavily indebted country's borrowing costs soaring.

Officials from the European Commission, the European Central Bank and IMF arrived in Lisbon earlier this month to go over Portugal's accounts and establish terms for a loan that is expected to reach 80 billion euros.

The terms could include austerity measures like those seen in Greece and Ireland, where taxes have been raised and public sector salaries cut. Reforms of Portugal's labour market may also be included to boost competitiveness.

Prime Minister Jose Socrates resigned last month after the opposition rejected austerity measures proposed by his minority Socialist government. His caretaker government will remain in power until an early election called for June 5.

Socrates is leading the talks with the bailout team and also coordinating efforts to obtain approval for the aid package from other parties, particularly the main opposition Social Democrats.

Finance Minister Fernando Teixeira dos Santos has said he hopes the European Union will approve the loan by mid-May.

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