Brussels, 26/11/2013 (Agence Europe) - On Tuesday 26 November, the Portuguese Parliament endorsed a draft budget for 2014 with nearly €4 billion of cuts, despite popular opposition.
Portuguese Prime Minister Pedro Passos Coelho, whose coalition government has a comfortable majority, is reported by Reuters as saying that, without the budget, the country would not be able to exit the aid programme on the scheduled date. . Civil servants will have their pay cut by between 2.5% and 12%, but the first €675 will not be cut.
On Saturday, Portuguese President Anibal Cavaco Silva asked the country's constitutional court to rule on the legality of a flagship measure from the budget to cut civil servants' pensions by a further 10%. The court has already rejected other measures recommended by the current government but, on Monday 25 November, it endorsed the increase in the working week in the civil service from 35 to 40 hours.
The Portuguese structural adjustment programme in return for financial aid is due to end in June 2014, when the country should return to the money markets. On Tuesday, the yield on long-term Portuguese bonds stood at 5.9%
Portugal is due to reduce its public deficit from 5.5% in 2013 to 4% in 2014. The Commission says that the economy will contract by 1.8% in 2013, but then grow slightly in 2014 (by 0.8%). The troika of lenders (European Commission, European Central Bank and International Monetary Fund) will send representatives to Lisbon on Wednesday 4 December for a new monitoring mission. (MB/transl.fl)