Portugal’s Leader Won’t Soften Austerity

Portuguese Prime Minister Pedro Passos Coelho vowed to push ahead with the government‘s plan to revamp the small country‘s economy despite calls from opposition lawmakers to renegotiate terms of its €78 billion ($97 billion) bailout.

“The big objectives that the government committed to will not be softened,” Mr. Passos Coelho told parliament in a state-of-the-country address.

However, he acknowledged the country’s fiscal adjustment is “challenging” due to an increase in unemployment that has forced the government to spend more on social benefits and receive less from tax revenue.

Portugal‘s jobless rate has risen more than expected, and is currently at 15.2%.

Official budget deficit figures released last month showed that the first-quarter budget deficit increased to 7.9% of gross domestic product, from 7.5% for the year-earlier period.

The budget deficit target for this year is 4.5%.

“We will act with determination to fulfill the set budget goals,” Mr. Passos Coelho said.

His comments were directed at main opposition leader António José Seguro of the Socialist Party, who said Mr. Passos Coelho’s austerity measures are killing the country’s economy.

“Come back to Earth, Mr. Prime Minister, and speak about the real life. The country is going from bad to worse,” Mr. Seguro said.

The debate in parliament coincided with the start of a two-day national strike by hospital doctors who are protesting against measures being taken by the government to cut expenses in the health sector.

The health ministry last month announced that it will use third-party companies to hire doctors to fill 2.5 million hours of service at the lowest price available

“The policies being developed by the health ministry, using the current crisis as excuse, have been responsible for cuts without any attention to the quality of health care,” the two unions that called the strike said in a joint statement on Wednesday.


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