Brussels, 06/05/2013 (Agence Europe) - On Monday 6 May, the Portuguese government would launch talks with the trade unions on a new wave of austerity measures, announced Portuguese Prime Minister Pedro Passos Coelho in a speech to the nation on Monday 3 May. He said there would be further cuts in public spending to ensure the country would be able to stick to its deficit reduction target, cutting the deficit to 5.5% of GDP in 2013, 4% in 2014 and 2.5% in 2015, as has been promised to the troika of lenders (European Commission, ECB and IMF). The prime minister said that the pension age would be increased to 66 and the working week for civil servants increased from 35 to 40 hours. The civil service will be trimmed back to some 700,000 through voluntary redundancies. The government hopes this will achieve savings of €4.8 billion by 2015. New austerity measures are the price to be paid for receiving the next batch of aid, €2 billion, as part of the bailout programme. Lisbon is hoping that the new measures will also make it possible to have its loan repayment deadlines extended to make it easier to return to the money market unaided. The country's lenders are sending new fact-finders to Lisbon on Tuesday 7 May to assess the new measures and see whether they are likely to meet the targets, explained Simon O'Connor, a spokesperson for Olli Rehn on Monday. The next Eurogroup meeting is scheduled for 13 May.

Passos Coelho said on Friday that he refused to increase taxes for fear of nipping prospects of economic growth, jobs and investment in the bud. The Portuguese economy is expected to contract by 2.3% in 2013 and unemployment exceed the current record high of 18%. The latest economic forecasts published by the European Commission on Friday suggest that Portugal's economy will gradually pick up later this year and grow by 0.6% in 2014. (SP/transl.fl)