Portugal parliament approves govt austerity plan

Portugal's parliament approved the Socialist government's latest austerity package in its final vote on the legislation.

Portugal parliament approves govt austerity plan

 

Portugal's parliament approved on Wednesday the Socialist government's latest austerity package in its final vote on the legislation.

Portugal has been seen as a potential next target of contagion in the euro zone crisis was sparked by Greece's debt situation, but the country said on Wednesday it has no intention of drawing on the emergency fund.

Parliament approved the minority government's austerity plan with the backing of the opposition centre-right Social Democrats, who had promised to support the legislation and backed it in the first vote last week.

The legislation had been anticipated to sail through on its second reading because it was approved in the first vote.

The plan, announced on May 13, aims to speed up a reduction in Portugal's budget deficit to 7.3 percent of gross domestic product this year and 4.6 percent in 2011, down from 9.4 percent in 2009. It will raise income and value-added taxes and cut the wages of some top-paid civil servants.

The additional austerity, which amounts to 2 billion euros, was unveiled after the European Union and International Monetary Fund announced last month a 750 billion euro emergency fund for countries that are hit by Europe's debt crisis.

Government officials have suggested the reduction in the budget deficit could be happening faster than expected because fiscal revenues at the beginning of the year rose faster than estimated thanks to a strong rebound in economic growth.

There had been some concerns in the euro zone that countries could struggle to pass austerity measures after neighbouring Spain passed its own austerity plan in parliament with a margin of just one vote.

Reuters

Last Mod: 09 Haziran 2010, 21:37
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