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Portuguese PM criticizes Socialists' anti-austerity measures

Xinhua, April 18, 2015 Adjust font size:

Portuguese Prime Minister Pedro Passos Coelho warned on Friday that a series of measures suggested by the Socialist party, the main opposition, could aggravate the country's deficit by 1.7 billion euros (1.8 billion U.S. dollars).

"What does this mean? That in 2016 the country would go back in style to having an excessive deficit. It wouldn't allow budgetary flexibility and it would aggravate the public debt ratio and it would inevitably pose a threat to external balance," Pedro Passos Coelho said at a quarterly debate at parliament.

Portugal has been applying sharp spending cuts and tax hikes since it signed a 78-billion-euro bailout in 2011 when it was on the verge of bankruptcy. Though that program ended last year, the center-right government has insisted on austerity as it strives to meet its growth targets.

The Socialists, who are leading in the opinion polls ahead of the general elections, have proposed several measures including lowering the VAT rate for restaurants and raising the national minimum wage.

Pedro Passos Coelho is aiming for 1.5 percent growth this year and 1.7 percent in 2016, however the International Monetary Fund has been critical of the country's progress, doubting that the country will be able to bring down its deficit target below 3 per cent of GDP this year and putting pressure on the country to implement even deeper reforms.

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