Portugal has become the second EU country – after Greece - to ratify a European Union pact tightening budgetary discipline.
The country’s parliament approved the plan by 204 votes to 24, with two abstentions. The assembly also approved the European Stability Mechanism, a firewall fund and the second new line of defence against possible debt contagion.
After tough negotiations, the pact which tightens rules on the control of public finances, was signed in Brussels on March 2 by 25 EU countries. Only Britain and the Czech Republic opted out.
Last year through difficult and unpopular reforms the Portuguese government managed to get its deficit down to 4.2 percent of GDP, from a 9.8 percent shortfall 2010.
Portugal’s debt to GDP is expected to rise from 110 percent to 115 percent at the end of this year, before seeing a steady decline.
But some critics have attacked the EU pact for not giving enough attention to growth and job creation, and there is alarm that the Portuguese jobless rate is projected to surpass 14 percent by the end of 2012.
EU pact sails through Portuguese parliament