Portugal approves austerity measures despite protests

2010-11-27 00:16:01 GMT+7 (ICT)

LISBON, PORTUGAL (BNO NEWS) -- Portugal's Parliament on Friday approved the government's austerity budget despite the mass protests in the last couple of days.

The new budget was force to pass through with the abstention of the opposition Social Democrats. It is aimed at reducing the public deficit for 7.3 percent to 4.6 percent by the end of 2011.

The controversial measures include the reduction of wages for government employees, an increase of 2 percent in taxes, and cuts in the public investment and social benefits. Portuguese unions claimed that the measures were mistaken and will only increase unemployment.

In response, the two main unions in the country (UGT and CGT) staged the biggest strike in the nation's history. UGT and CGT got together for the fist time in 22 years and organized the massive protest against the austerity measures.

Many analysts believed that Portugal would need a bailout from the European Union and the International Monetary Fund (IMF) but the Portuguese government said that to could deal with its sovereign debt without any external help.

"I see a lot of people who think that by talking a lot about the IMF that they can somehow contribute towards the country seeking some sort of help," said Prime Minister Jose Socrates. "But when all IS said and done, they are confusing their desires with the reality. The country needs no help."

According to Prime Minister Socrates, the reports of Portugal needing a bailout are exaggerated as the country was one of the economies that best resisted the crisis in 2009. In addition the European nation registered a 1.8 percent year-on-year growth from January to September.

"There has been no help given to Ireland, nor has there been any given to Greece, because it is an investment as the European Fund buys the debt of these countries. As a result, when debt is purchased, an investment is being made in these countries which in turn have to pay interest."

The Portuguese government announced in September a series of austerity measures to address the financial issues and consolidate the economy of the country . The measures were ratified by the Parliament on November 3.

-- © BNO News All rights reserved 2010-11-27

Spain next....

i like Nige, head firmly screwed on & in touch...

They live over their governments income and then complain when the government is about to go broke...