Portugal introduces a mode of austerity economy

17.10.2012

Portugal’s government has recently unveiled the budget of 2013. The new budget contains austerity measures, which are designed to help Portugal in the struggle with the financial crisis.

Thus, the 2013 budget provides for increasing the income tax from 9.8% to 11.8% and, in addition, the introduction of temporary additional tax on all income in the amount of 4%.

Other measures contained in the budget include plans to increase capital gains tax from 25% currently to 28%. Besides, civil servants will forfeit their Christmas bonus.

To reduce costs, the retirement age for public sector workers increased from 63 to 65 years and will be the same as in the private sector.

The government reduces payments for sick and overtime for employees and reduces the number of temporary contracts.

Defending the budget, Portugal’s Finance Minister Vitor Gaspar insisted without these measures, it will be impossible to fulfill the terms of the loan in the amount of 78 billion euros, provided by the country in the past year in exchange for a commitment to reduce the budget deficit.

Expert’s opinion

Such «draconian» measures have not left indifferent the Portuguese. Throughout the country are mass rallies. And it is not surprising, because such a hard budget hasn’t ever been in the country.

Egurtsova Yulia ( Paralegal of Moscow office Company Honest&Bright)