Portugal passes austerity budget as recession deepens

Portugal's parliament has passed the 2012 budget bill as widely expected. But the final reading was marked by the main opposition Socialist party's abstention - a move aimed at showing political cohesion behind the bill's sweeping austerity measures, even as it promises the deepest recession in decades.Portugal passes austerity budget as recession deepens Portugal's parliament has passed the 2012 budget bill as widely expected.

But the final reading was marked by the main opposition Socialist party's abstention - a move aimed at showing political unity behind the bill's sweeping austerity measures, even as it promises the deepest recession in decades. Outside parliament, there was widespread agreement too, but demonstrators felt that the poor will be hit most hard by planned cuts. Under the terms of the EU/IMF 78-billion euro bailout Portugal must drastically reduce its deficit. That means tax hikes and a suspension of holiday and end of year bonuses for civil servants, among other deeply unpopular measures. "I have two daughters, I work in public service and my husband too, and these cuts make us have less spending power," said one protestor. "Next year it will be worse. They say there are going to be improvements, but we don't see that, what we see is things getting worse," added another demonstrator.However, Portugal's centre-right coalition government insists the budget will create a basis for sustainable growth and debt reduction. It also expects the economy to start recovering late next year.

Source: Euronews