Portugal set to launch new talks on austerity

Portugal set to launch new talks on austerity

LISBON - Agence France-Presse
Portugal set to launch new talks on austerity

People protest against austerity in front of the presidential palace in Lisbon. REUTERS photo

Portugal’s embattled government will hold talks soon with trade unions and industry bosses on alternatives to tough austerity measures after a storm of criticism of planned spending cuts.

The moves were decided following an eight-hour meeting of the advisory Council of State convened late on Sept. 21 by President Anibal Cavaco Silva.

It followed a statement by Prime Minister Pedro Passos Coelho that he is open to dialogue after his proposals met with fierce opposition.

They included raising employees’ social contributions from 11 to 18 percent of wages, while cutting those of employers from 23.75 to 18 percent in the hope of creating jobs.

“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.

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

But the spending cuts and economic reforms required as part of the bailout have caused a recession, with the economy shrinking by 1.2 percent in the second quarter.