Concern is growing that Greece’s debt troubles could spread to other eurozone economies after Portugal’s credit rating was cut yesterday.
But although Fitch Ratings downgraded it to a double “A” minus, it is still within the top end of the ratings scheme.
Portugal’s Finance Minister Teixeira dos Santos said: “The note clearly, recognises that the stability and growth programme proposed by the Portuguese government is a credible one based on careful assessment and is a programme which has the ambition to carry out a cleansing of the public accounts.”
The minority Socialist government of Jose Socrates is hoping parliament will approve his austerity plan today. He needs to cut Portugal’s deficit to 2.8 per cent of GDP by 2013.
All eyes will be on Portugal’s largest opposition party the Social Democrats. Their abstention is vital to allow the government to get the plan through.