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Hard times confirmed for the Portuguese

Hard times confirmed for the Portuguese
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Portugal’s belt-tightening budget for next year has been approved by parliament, paving the way for public sector wage and welfare cuts and VAT increases.

The idea is to save five billion euros in 2011 and bring the national deficit down from 7.3 percent to 4.6 percent.

The minority socialist government had to rely on the opposition abstaining from the vote for the budget to pass through parliament.

It concluded months of political bickering that at one point had threatened the government’s survival.

Prime Minister José Socrates defended the plan a necessary evil, saying:

“These difficult measures are the only choice. Politicians working in the country’s best interests must understand that these measures are necessary. Of course some will only think about their own political ambitions and partisan politics but now is not the time to think like that.”

The Portuguese public expressed its discontent on Wednesday with the country’s first general strike for more than 20 years.

And the budget plan seems not to have won over the markets. Many analysts believe Portugal will be forced to follow Greece and Ireland in asking for an international bailout, although the European Commission has joined the Portuguese government in insisting this will not be the case.