The decision to tax bank deposits in Cyprus in return for a bailout has sent euro and bond markets falling, sparking fears among Portuguese politicians. Portuguese President Cavaco Silva said the move was “very dangerous.”

As Portugal nears judgement on its bailout progress, the troika of international lenders are ready to announce they will give the country one more year to meet its deficit target. But they will maintain their rigid stance on expenditure cuts in a frantic attempt to close the budget gap.

The troika officials, who arrived in Lisbon last week to carry out the seventh quarterly review of Portugal’s bailout programme, delayed their departure to discuss cuts in public expenditure which the government must carry out before the end of 2014.

Portugal’s minister of finance insists the country will end its €78bn bailout programme in the second half of this year as planned, without asking for more money – even if it is granted more time to meet its budget deficit goals.

As Portugal reportedly expects to enter the bond market later this year, the bailout troika has given the green light for the country to receive its next loan tranche worth €838.8m.

IMF chief Christine Lagarde says Portugal’s adjustment programme, budgetary consolidation and structural reforms are on track. And she is confident the country will not follow in Greece’s footsteps.

German Chancellor Angela Merkel praised Portugal for meeting all goals set in its €78bn bailout, while Prime Minister Passos Coelho said he rejected the possibility of a refoundation of the memorandum.

One day before her first official visit to Portugal, the German chancellor said in an interview to national broadcaster RTP she sees no need for Portugal to renegotiate its bailout programme. However, Angela Merkel also acknowledged the “difficulties” in implementing reforms.

Thursday, 11 October: Daily newspaper Público reports that current Deputy Minister Miguel Relvas, when serving as secretary of state for local administration in 2004, could have favoured the firm managed by Passos Coelho before he became prime minister, as it was awarded the monopoly to oversee the training of municipal employees in regional airfields in the Centre region.