EU OK's Portuguese government's spending plans

Portugal’s new socialist government has seen its first ‘anti-austerity’ budget approved by the European commission.

Since 2013, the EU executive has the power to monitor spending by eurozone countries.

Portugal’s 2016 budget only got the green light after the government agreed to nearly 900 million euros of extra cuts.

But Brussels will keep a close watch.

“We need to remain very attentive, we cannot be certain that the Portuguese budget plan offers enough reassurance to correct the excessive deficit in 2016 – and government debt is still very high at 130 percent of GDP,” said Valdis Dombrovskis, a European Commission vice-president.

In Spring, the commission will reassess Portugal’s compliance with it obligations under the stability and growth pact.

The plan has only been approved now – three months late – after protracted coalition negotiations.

Portugal tapped a 78 billion-euro bailout in 2011.