EU source: Portugal to get next slice of aid

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President of the European Central Bank Mario Draghi, left, looks on as he listens to European Commissioner for Economic and Monetary Affairs Olli Rehn, during the Eurogroup meeting, in Luxembourg, Monday Oct. 8, 2012. Finance ministers from the nations sharing the euro currency assess the latest developments in the financial crisis. (AP Photo/Yves Logghe)

LUXEMBOURG (AP) — A European Union diplomat says Portugal's international creditors have agreed to give the country the next slice of its rescue loans, worth €4.3 billion ($5.57 billion).

The decision was widely expected, even though Portugal has said it would miss the targets laid out in exchange for the €78 billion bailout. Already, the foreign lenders have allowed them to reduce their deficit to 5 percent of its gross domestic product this year, rather than 4.5 percent.

The diplomat spoke on condition of anonymity because the discussions were closed. On Tuesday, Portugal is expected to win another concession — to reduce its deficit to 3 percent by 2014 instead of next year.

Portugal applied for a bailout after it built up huge debts following a decade of meager economic growth. In 2010 in budget deficit was 10.1 percent.