Thursday, January 20, 2022

Portugal’s new Gov’t says Goodbye to Post-bailout Austerity

By on January 22, 2016

LISBON, Portugal – Portugal’s new Socialist government is promising to lower the country’s budget deficit this year, while also scrapping unpopular austerity measures.

A draft 2016 state budget presented to Parliament on Friday puts the deficit target at 2.6 percent, down from an expected 3 percent last year.

But the minority government, supported by the Communist Party and radical Left Bloc, still intends to cut the tax burden. That includes cutting sales tax at restaurants to 13 percent from 23 percent as part of an effort to stimulate consumption.

Critics say the government is attempting a balancing act that is bound to fail because of Portugal’s huge debts. It needed a 78 billion-euro ($84.5 billion) bailout in 2011 to avoid bankruptcy.

The budget proposal requires approval from Parliament and Portugal’s eurozone partners.

By The Associated Press

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