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Portugal toughens austerity in 2012 budget

Published on 13/10/2011

The Portuguese government on Thursday presented a 2012 budget with toughened austerity measures to meet the targets set by its international bailout.

“The country is going through a national emergency,” Prime Minister Pedro Passos Coelho said in a televised address after his cabinet approved the 2012 budget.

“The adjustment process will have to be deeper and include more stringent measures.”

Among those measures, Coelho announced the temporary suspension of 13th and 14th month salary payments for civil servants who earn more than 1,000 euros a month.

In the private sector, employees will be requested to work half an hour more per day. VAT is set to be hiked while the health and education budgets will be slashed.

Portugal in May received a 78-billion-euro bailout from the European Union and International Monetary Fund, conditioned on a tough austerity programme.

“We have to do more, much more than what was initially planned,” the prime minister said.

The budget drafted by the government is to be submitted to parliament on Monday.