Home News Portugal faces trouble, but will meet bailout targets: PM

Portugal faces trouble, but will meet bailout targets: PM

Published on 11/07/2012

Prime Minister Pedro Passos Coelho conceded Wednesday that Portugal is having problems meeting budget targets set down in its EU-IMF debt bailout but that it would take steps to ensure they would be.

Portugal, bailed out to the tune of 78 billion euros ($96 billion) last year by the EU and International Monetary Fund, realised there “are considerable risks associated with implementing the programme,” Passos Coelho said.

Lisbon is supposed to cut the public deficit — the shortfall between revenue and spending — to 4.5 percent of Gross Domestic Product this year, aiming ultimately to meet the EU ceiling of 3.0 percent in 2013.

Figures earlier this year showed the country had reduced the defict to 4.2 percent in 2011, below the EU-IMF target of 5.9 percent and down sharply from 9.8 percent in 2010.

“The budgetary risks are not so deadly serious as to knock us off course. The government is watchful, we have identified the risks and we are working to correct and minimise them,” Passos Coelho told parliament during a debate on the state of the nation.

The government’s plans were hit badly when the constitutional court struck down earlier this month its suppression of 13th and 14th month extra payments to civil servants and pensioners, although it allowed it for this year.

“We are going to propose for the 2013 budget that our measures respect the spirit and the letter of the court ruling, in full and without any ambiguity,” he added.

The prime minister did not give any details of the possible new measure, saying only that they would “be the least harmful possible for people and the economy.”

The government’s austerity programme has provoked widespread public unease and helped push the economy into a deep recession with a contraction of 3.0 percent expected this year and unemployment above 15 percent.