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Portugal’s PM says open to dialogue on disputed austerity

Published on 21/09/2012

Portuguese Prime Minister Pedro Passos Coelho said Friday that he is open to dialogue on disputed austerity measures, after the planned spending cuts sparked outrage in the bailed out country.

“The government is neither blind nor deaf and I will not stay silent,” Passos Coelho told parliament.

“I have not confused determination with intransigence,” he said.

The prime minister’s move to push through cuts in public spending, including raising employees’ social contributions from 11 to 18 percent of wages, has been met with fierce opposition.

But on Friday, he expressed his openness to dialogue, pointing out that he has already met social partners this week, and would do so again on Monday. He was also due to meet members of the main union CGTP Friday.

“We have always maintained an attitude of dialogue,” the prime minister stressed.

Separately, President Anibal Cavaco Silva, who plays a mainly protocol role, has called a meeting later Friday with the state council which is rarely consulted.

The last time the council, which has an advisory role, was consulted was in 2009 over the country’s deployment of troops in Afghanistan.

Meeting deficit targets is key for Portugal to receive more funds under an EU-IMF rescue package negotiated last year worth 78 billion euros.

But the spending cuts and economic reforms required as part of the bailout have caused the economy to sink into a recession, with the economy shrinking by 1.2 percent in the second quarter, much faster than the 0.1 percent rate in the first quarter.

The contraction is expected to reach 3.0 percent for the whole year.

Hundreds of thousands of Portuguese marched on Saturday in Lisbon and cities across the country against the austerity, and the CGTP has called for further mobilisation on September 29 in Lisbon.