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International Monetary Fund, European Commission and European Central Bank officials will be in LisbonBuy nike running shoes online today as they start preparing an estimated 80 billion- euro ($116 billion) aid program for Portugal, the third euro- region nation to request a bailout in less than a year.

The EU aims to reach an agreement on the aid package on May 16, three weeks before the country’s June 5 early election, which was prompted by the resignation of Prime Minister Jose Socrates after parliament rejected his deficit-cutting plan.

Portugal’s bid for emergency aid last week opened what European officials say will be the final chapter in the debt crisis that erupted in Greece last year, spread to Ireland and triggered speculation that the 17-nation euro area might not survive in its current form.

“It is expected that the program is completed and approved by both the EU and IMF by mid-May 2011 in order to allow the disbursement of the first tranche ahead of the large funding needs of June,” Antonio Garcia Pascual, chief southern European economist at Barclays Capital, said in a note yesterday.

The next government will need “not only to implement further fiscal consolidation measures but also to implement difficult and potentially unpopular structural reforms, which are likely to target a leaner and more efficient public sector, further labor market reforms, and enhanced competition in goods and services markets,” he wrote.

‘Ambitious’ Plans

EU finance ministers said in an April 8 statement that the program for Portugal will include “an ambitious fiscal adjustment,” an “ambitious privatization program” and measures to maintain the liquidity and solvency of the financial sector.

IMF experts will join European Commission and ECB teams today “for technical discussions with the government,” the Washington-based IMF said by e-mail yesterday. The initial assessment will serve as a “basis” for policy discussions starting April 18, the IMF said April 10.

The Portuguese government will lead negotiations on a financial aid plan for Portugal, Socrates said on April 10. Socrates said Buy cheap nike mens acg sandals 2011on April 6 that the government would seek an EU- led rescue package as the nation faces bond redemptions in April and June that total 9 billion euros.

EU Monetary Affairs Commissioner Olli Rehn on April 8 said an aid program for Portugal will likely amount to about 80 billion euros. Rehn said he’s confident Portugal can meet its financing needs in April and in May, “while June will be more challenging.” He declined to say what portion of Portugal’s bailout will be designated for the country’s banks.

Portuguese Targets

Portuguese President Anibal Cavaco Silva on April 9 called for an “interim” financial package for his country and said the government that wins June elections should hammer out the details of a final aid program. Portugal’s main political parties have agreed on the deficit targets of 4.6 percent for this year, 3 percent next year and 2 percent in 2013, he said.

The Social Democrats support the aid request, Pedro Passos Coelho, leader of Portugal’s biggest opposition party, said last week. Opposition parties on March 23 united to reject the government’s proposed additional cuts that were the equivalent of 4.5 percent of gross domestic product over three years. That package included a reduction in pensions of more than 1,500 euros a month and further cuts in tax benefits.

Finance Minister Jyrki Katainen of Finland one of the euro region’s six states with AAA credit ratings, said on April 8 that Portugal’s deficit-reduction steps must go beyond the measures that failed to pass parliament last month.

Rising Yields

Portugal reported a 2010 budget defict equal to 8.6 percent of GDP, higher than a 7.3 percent the government had previously forecast, after a change in EU accounting rules forced it to add more than 2 billion euros in charges to last year’s accounts.

Yields on Portugl’s two-, five- and 10-year bonds have all reached record levels since Socrates offered his resignation buy Reebok ZigTechon March 23, leaving him in charge of a caretaker government with limited powers until the June 5 election.

The difference in yield that investors demand to hold Portugal’s 10-year bonds instead of German bunds reached a euro- era record of 544 basis points on April 5 and was at 513 yesterday. The 10-year bond yield rose to a euro-era high of 8.80 percent on April 6 and the five-year bond yield reached a high of 10.17 percent on April 5.

Portugal had been trying to avoid requesting aid for the first time since 1983, when it received external help from the Washington-based IMF.

The country’s economic growth has averaged less than 1 percent a year in the past decade, one of Europe’s weakest growth rates. Portugal’s unemployment rose to 11.1 percent in the fourth quarter, the highest since at least 1998, as the economy contracted for the first time in a year.