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Portugal must avoid 'accidents' to exit bailout: central bank head

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(Globalpost/GlobalPost)

LISBON (Reuters) - Portugal must avoid "accidents" like its recent political crisis if it is to exit its international bailout next year as planned, Bank of Portugal Governor Carlos Costa said on Wednesday.

"Any accident, and we had a proof of this last week, causes hyper-reactions in the markets. We must have a totally credible behavior as we exit the program," Costa, a member of the European Central Bank's Governing Council, told a conference.

Portugal's 10-year bond yield jumped to over 8 percent last week from around 6.4 percent as a rift in the ruling coalition threatened the government and the country's plans to exit its 78-billion-euro bailout in June 2014.

Costa said Portugal must remain committed to hitting budget goals set out in the program: "The next nine months of the Portuguese economy are critical for the next phase. We will need to assure and confirm the credibility of our commitments and of the evolution of our economy and budget situation."

President Anibal Cavaco Silva will tell the nation later on Wednesday if he approves a proposed solution to the crisis.

(Reporting by Daniel Alvarenga; Editing by Catherine Evans)

http://www.globalpost.com/dispatch/news/thomson-reuters/130710/portugal-must-avoid-accidents-exit-bailout-central-bank-head