The European finance ministers approved yesterday the 78 billion euros bailout for Portugal to be the third debt-laden nation forced to ask for support as their fiscal health continued to deteriorate. The bailout will be an IMF-EU program for seven-and-a-half years.

Portugal will receive 18 billion euros as the first allotment of the bailout by the end of this month or the beginning of June according to what Portuguese finance Fernando Teixeira dos Santos minister told reporters in Brussels yesterday.

The IMF loans for Portugal will be at 3.25% interest rate, while the rate on the European portion of the bailout will be between 5.5% and 6.0% according to previous comments from EU Monetary Affairs Commissioner Olli Rehn on May 10. Yesterday Rehn said that the cost for the bailout from the European share will be 215 basis points over relevant rates for the funds from the European Financial Stabilization Mechanism and a premium of 208 basis points for the aid from the European Financial Stability Facility.

Dos Santos said that the average interest for the life of the bailout -seven-and-a-half years- will be around 5.1%. He told reporters that the average for the first three years will be around 5.0% and after than interest rates will rise to around 5.2%.

The package is still pending the approval of all the euro area governments, which is expected to go smoothly after Finland finalized the position on the bailout in the Parliament with agreement among the new parliament parties.