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Portugal budget cuts ‘indispensable’: EU’s Barroso

Published on 24/03/2011

Portuguese budget cuts voted down by parliament in Lisbon are "indispensable," the head of the European Commission, ex-Portugal premier Jose Manuel Barroso said Thursday.

“It is important for confidence in the Portuguese economy that the consensus that I believe exists in Portugal regarding the need to achieve fiscal consolidation (and) structural reforms is clearly reaffirmed,” Barroso said ahead of an EU summit starting at 1600 GMT.

Rocked by the overnight resignation of prime minister Jose Socrates, European Union leaders are staring at the imminent prospect of a third emergency financial bailout since May last year if Portugal cannot make the required adjustment.

Barroso said that targets including a Portuguese commitment to reduce its annual deficit to 4.6 percent of GDP this year, backed by eurozone leaders at a special summit earlier this month, “are indeed indispensable for confidence in the European economy.”