Portugal president speaks out against cuts

Portuguese president Anibal Cavaco Silva on Wednesday spoke out for the first time against cuts being imposed by the government, criticising a measure targeting civil servants and pensioners.

The 2012 draft budget drawn up by Prime Minister Pedro Passos Coelho’s centre-right government contains toughened measures it says are needed to meet conditions set by international creditors.

The proposal includes the temporary suspension of 13th and 14th month salary payments for civil servants and pensioners who earn more than 1,000 euros ($1,382) a month.

“The government has changed but I haven’t changed my view. I have already said it, and I will say it again: ‘It’s a violation of tax fairness’,” the president told media at a meeting of economists on Wednesday.

Passos Coelho’s government replaced that of Jose Socrates’ socialists in June.

It is the first time the president, who belongs to the ruling party, has spoken out against the current government’s policy.

Portugal’s two main unions the UGT and the CGTP announced Wednesday that a strike protesting the proposed spending cuts would be held on November 24.

Meanwhile on the bond market, Portugal raised 1.5 billion euros in three and six month treasury bonds at steady rates compared to previous operations, the Institute for the Management of Treasury and Public Credit said.

The rate of return to investors on three-month notes was 4.972 percent, the same as on October 5, and 5.250 percent on six-month notes, compared to 5.249 percent on September 21.