Lisbon announces new cuts

lisbon announces new cuts

His center-right government rejects further tax increases, the head of government said in lisbon on sunday. The EU commission urged compliance with the austerity program agreed with international lenders. "Any deviation from the objectives of the program or their renegotiation would undo the efforts already made by the portuguese burghers (…) and demand the difficulties of the adjustment process."

The brussels commission said on sunday evening that it was therefore confident that the portuguese government would quickly submit the necessary amendments to adjust the 2013 budget in accordance with the agreements reached with the troika of the eu, the european central bank and the international sovereign wealth fund.

Passos coelho announced savings in the areas of social security, health, education and state-owned enterprises. His government will do everything in its power to prevent the euro crisis country from having to submit a second request for help to the EU. He accused the constitutional judges of putting the country’s economic recovery in jeopardy.

On friday, the constitutional court ruled that parts of the austerity program were inadmissible, including cuts in vacation pay for civil servants, public sector employees and pensioners, as well as cuts in unemployment benefits and sick pay. Since the state now has to pay these funds again, there is a coverage gap of about 1.3 billion euros in the budget. Passos coelho stressed that the government is against closing this gap with higher taxes, as this would reduce the chances of economic recovery.

"The government is committed to all the objectives of the aid program," said the prime minister. "The portuguese state will meet its obligations at home and abroad."The head of government convened his cabinet for a crisis meeting on saturday and secured the backing of president anibal cavaco silva on sunday night.

The ruling aggravated the situation in the euro-crisis country, which had committed itself to a tough austerity course with the EU. Cavaco silva spoke out against a dissolution of the government and against new elections despite the worsening financial crisis. "The conditions are in place for the government to remain in office until the end of the legislative period," the head of state said after a crisis meeting with the prime minister. The socialist opposition leader antonio jose seguro demanded the resignation of the government and new elections.

Portugal had received a 78-billion-euro aid package from the "troika" in 2011. In return, the poorest country in western europe had to commit to a drastic austerity policy with its lenders in order to reduce its budget deficit and restructure its public finances.

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