Portuguese opposition against austerity plan

17th March 2011, Comments 0 comments

Portugal's main opposition party Thursday slammed new austerity measures announced by the minority government, causing a political impasse in the debt-ridden nation as it seeks to avoid an international bailout.

The new austerity measures announced by the government are "extremely socially unjust," said Pedro Passos Coelho, adding that his Social Democrats (PSD) would not help the government approve the measures.

Despite painful austerity measures already taken the markets in the eurozone member have driven borrowing costs to unsustainable levels over the long term.

Speculation has mounted that Lisbon will be forced, like Greece and Ireland last year, to accept an international bailout.

In a bid to appease markets, Finance Minister Fernando Teixeira dos Santos announced last week that Portugal would tighten its austerity measures to ensure it meets its deficit reduction targets.

The announcement won plaudits from Brussels and from analysts, but provoked anger inside the country over a lack of preliminary consultations.

The fourth austerity package in a year had reportedly been worked out in close cooperation with the European Commission and the European Central Bank, however.

The PSD has allowed passage of previous austerity measures "in the national interest", but Passos Coelho said after meeting with President Anibal Cavaco Silva that his party's position was "firm and unchangeable".

Cavaco Silva was due to meet with Prime Minister Jose Socrates on Friday.

Socrates said Tuesday that the new austerity measures were needed so that Portugal could avoid appealing for a bailout from the European Union and International Monetary Fund as Greece and Ireland did last year.

Socrates warned against a political crisis which he said would "open the door to the IMF".

However, he has also threatened to resign if parliament does not approve the measures, which include taxing pensions and cutting spending on health and unemployment benefits.

Parliament may begin debating the measures as early as next week, but they will not necessarily face a vote.

However Socrates must also soon present to parliament a new stability and growth package for 2012-13, which is to be submitted to the EU commission late next month.

© 2011 AFP

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