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Portugal approves 2011 budget with harsh austerity measures

0 CommentsPrint E-mail Xinhua, November 27, 2010
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The Portuguese parliament on Friday approved the 2011 budget with the main opposition party abstaining in the final vote.

The budget adopted harsh measures to reduce the public deficit, aiming at reducing the deficit from 9.3 percent of the GDP last year to within 3 percent in 2013.

The most disputed measures in the bill included a wage cut of up to 10 percent on all civil servants and workers of state-owned companies and no raises in pensions and the minimum wage.

Tougher rules for unemployment benefits and benefits reduction for poor workers also were implemented.

Finance Minister Teixeira dos Santos said the budget aimed at appeasing international financal markets.

"There is no economic growth without funding and in the current situation of the financial markets our priority is to obtain funding for our companies," Teixerira told parliament.

Portugal fears a contagion of the Irish economic crisis. The current yield on the 10-year Portuguese debt is around 400 basis points higher over the German debt in the secondary market.

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