Portugal’s government says it will be able to slash its 2010 public deficit to less than its original target of 8.3 per cent.
Finance Minister Fernando Teixeira dos Santos wants to make cuts earlier than planned. A review of all public works projects was set to be announced late on Thursday.
The move is to appease investors who fear a Portgual default on its sovereign debt. Standard and Poor’s downgraded its credit rating on Tuesday.
“We are going to act quickly and in an adequate form…not only to calm the marketsbut to do the work that is necessary structurally to be done in Portugal,” said Antonio De Sousa, the head of the Portuguese Bank Association.
Prime Minister Jose Socrates and the opposition have vowed to work together to tackle Portgual’s fiscal woes.
Part of the PM’s plans to get the deficit down inclide a public sector pay freeze, large-scale privatisations of state assets and hiking taxes for Portugal’s highest earners.