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ISSUE 60 page 5

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100,000 on streets in Portugal force government U-turn on cuts

 PORTUGAL, ALONG WITH IRELAND, HAS BEEN SEEN AS one of the ‘star’ pupils of the EU austerity programme administered with the European Central Bank (ECB) and the International Monetary Fund (IMF). Large cuts in public provision, wages and pensions seemed to go through with barely a whisper of protest but the tide has now turned. Following the defeat of a proposal to make everyone work half an hour more each day (see our last issue) the centre-right government decided to  further appease the EU-ECB-IMF ‘troika’ before they release another €4.3 billion of the the country’s €78 billion loan. The new plan was to increase employees’ social security contribution by 7% of salary while reducing the employers’ share by 5.75%. However Antonio Seguro, leader of the Socialists described the proposal as ‘immoral and inacceptable’ while the President of union confederation CGTP responded: ‘We don't accept that the government take a single dime out [of[ people's income’ and called for demonstrations. Workers, who had already seen their real wages drop by an average of 24% since the onset of the financial crisis, did not want to lose
Portugal protestPassos Coelho, P.
the equivalent of another month’s wages and over 100,000 people quickly appeared on the streets to protest as  the Presidential State Council continued its discussion of the plan into the early hours. Prime Minister Pedro Passos Coelho was criticised by the Council which called for ‘political and social dialogue to seek consensus’ and asked that ‘Any solutions should … guarantee an equitable and just distribution of sacrifices as well as protecting those families with the lowest income’. Faced with this opposition as well as  from academics, businesses, some of which offered to make up the loss to workers with a rise in wages, and even  from within his ruling coalition Mr. Passos Coelho backed down. It is now believed that he will cut public sector pay and increase personal taxes and property levies in order to meet the EU-stipulated budget deficit target of 4.5% by 2013. Trade unions will table their own proposals to raise taxes on business and dividends and tighten up on tax fraud. According to the CGTP a new financial transactions tax set at 0.25% would raise €2 billion

‘Damn the troika! We want our lives’ Portuguese protesters tell Prime Minister Pedro Passos Coelho

 

 

 




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