Friday, May 6, 2011

Portugal faces a battering over bailout

Sales taxes will be increased, health spending reduced, pensions and unemployment benefits cut, and laws protecting workers dropped under the terms of the proposed bailout plan announced this week. Unemployment is forecast to rise to 13 per cent from 11.1 per cent.

Portugal will also face a two-year recession and be forced to sell major state assets in such companies as the utility giant EDP.

All the main parties in Portugal have agreed to the deal but it will not be finalised until the meeting of eurozone finance ministers on 16th of this month. Meanwhile, 250,000 civil servants have been striking today to vent their anger over yet more austerity measures.

It makes uncomfortable reading, but the full 33-page text of the memorandum drawn up by the officials who negotiated the rescue plan can be found by clicking here: http://economico.sapo.pt/public/uploads/memorandotroika_04-05-2011.pdf

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