Euro zone approves 800 mln euros aid to Portugal

BRUSSELS, Oct 8 (Reuters) - Euro zone finance ministers signed off on a further tranche of financial aid to Portugal on Monday and said the country was working hard to put in place the budget cuts and structural economic adjustments demanded of it.

In a statement following a meeting in Luxembourg, the Eurogroup, made up of the finance ministers of the 17 euro zone countries, said Lisbon was carrying out its reforms faster than expected and was broadly on track to meet its goals. It has been given an extra year to meet its deficit targets.

"The Eurogroup notes with satisfaction that the government's active preparation of a return to the financial markets in 2013 has recently been met with success," it said, adding that it had approved the next disbursement of 800 million euros from the eurozone's temporary EFSF bailout fund.

A further 3.5 billion euros from the eurozone and the IMF is expected to be disbursed at the end of the month, it said.

The Eurogroup also welcomed the Portuguese government's decision to backtrack on a plan to increase the social security burden on employees, an initiative that had met with widespread popular unrest.

"The Eurogroup welcomes the determined action the government hastaken to swiftly replace the originally envisaged shift in social security contributions by alternative measures."

(Writing by Luke Baker)

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