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Portugal to slash public sector salaries by up to 12%


Portugal to slash public sector salaries by up to 12%

Amid angry protests on the streets of Lisbon, the Portuguese parliament has approved the country’s budget for 2014.

600,000 public sector workers are set to face salary cuts of up to 12 percent and reductions to their pensions.

Portugal’s Finance Minister Maria Luis Albuquerque told parliament the public sector cuts were “inevitable” – as the government struggles to reduce its deficit and satisfy its international lenders.

Bruno Dias of the Portuguese Communist Party criticised the VAT rate of 23 percent on businesses in the food and drink sector. Dias described “a desperate economic and social situation for thousands of small and micro businesses” who had been “condemned once again in the budget.”

Portugal plans to slash spending by 3.9 billion euros in total. The aim is to bring down the deficit from 5.5 to 4 percent of GDP – a condition of Portugal’s bailout package from the EU and the International Monetary Fund (IMF).

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