Portugal needs golden budget rule: PM

Portugal should write a so-called “golden rule” for balanced budgets into its constitution, Prime Minister Pedro Passos Coelho said on Friday in the face of reticence from the Socialist opposition.

Coelho, reporting on the outcome of a European Union summit on the eurozone debt crisis a week ago, told parliament that the golden rule would strengthen the credibility of the decisions taken.

At the summit, 26 of the 27 EU countries, excluding Britain, agreed on almost automatic sanctions against countries breaching budget rules and on the introduction of golden rules for balanced budgets.

“We cannot go on from summit to summit announcing commitments which end up not being carried out. The agreements must be respected,” Coelho said.

Commenting on the debt crisis within the 17-nation eurozone, he said: “It is not enough to have the same currency. We must have strict coordination, strict budget vigilance and therefore a union of budget stability.”

Portugal was the third country after Greece and Ireland to be rescued from its debt with loans from the European Union and International Monetary Fund.

The help was conditional on the introduction of deep reforms to control public finances and restructure the economy.