Portuguese parliament backs austerity budget

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Portugal’s lawmakers have given outline approval to a budget bill for 2014 that slashes spending on state pensions, public sector wages, healthcare and education.

As it was presented, protesters in the public gallery chanted “Government – out!” before being removed by police.

Deputy Prime Minister Paulo Portas warned the budget has to be approved if the country is to exit the economic crisis: “Portugal cannot go back to a time of wasteful spending and endless debt. It simply cannot. Because if we do that we would have to abandon the euro and we would be on our own in the world, chasing a fantasy of self-sufficiency.”

Spending will be cut by almost 3.2 billion euros – which is 2.3 percent of Portugal’s gross domestic product – with the target of getting the budget deficit down to four percent of GDP, from a forecast 5.9 percent this year.

Among the measures, public sector workers earning over 600 euros a month will have their wages cut by between 2.5 percent and 12 percent.

After discussion, a final vote on the budget bill will be held on November 26, but it will then almost certainly be reviewed by the country’s Constitutional Court, which has rejected previous government austerity measures forcing the politicians to come up with alternative ways of cutting spending.

Prime Minister Pedro Passos Coelho said the government was convinced the bill was constitutional.

“There is no clear violation of the constitution in any of the measures proposed… My conviction is that the government was within the boundaries of the constitutional interpretation that matches the reality we live in,” he said.

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