Portugal will do everything needed to cut its excessive deficit, Finance Minister Fernando Teixeira dos Santos said on Tuesday after S&P ratings agency cut the country's credit rating by two notches to A- with a negative outlook.
"As in the past, we will do whatever is necessary to ensure the elimination of the excessive deficit and promote the competitiveness of the economy," he told Reuters in a written statement.
The minority Socialist government has promised to reduce the budget deficit to below 3 percent of GDP by 2013, from 9.4 percent last year, by freezing civil servants' pay, raising tax on high earners and eliminating tax exemptions.
"The government already started to execute on the measures," the minister said, adding that the government will move ahead "without hesitations."
He said that Portugal, which has public debt levels which are much lower than Greece, was different to Greece. "The majority of opinions are that Portugal and Greece have very different realities," Teixeira dos Santos said.
The minister urged the country to come together to take the necessary action to rebuild confidence.
"The country has to respond to these attacks from the market. The time has come for the government and the (opposition) parties, especially the Social Democrats, to reach understanding on this; we need to execute the necessary measures. This is not the time for futile quarrels," the minister said.
There have been concerns that the opposition would not help the government in passing necessary legislation in parliament to cut spending. Because the government does not have a majority it needs support from the opposition to pass laws in parliament.
Fitch Ratings cut Portugal's sovereign credit rating by one notch to AA- in March, above S&P's level. Moody's has Portugal at Aa2, also above S&P's grade for the country.
ReutersLast Mod: 27 Nisan 2010, 20:32