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Delay in adjustments to Portugal's pension system could lead to dramatic approach: EC official

Xinhua, June 13, 2015 Adjust font size:

Visiting European Commission Vice-President Valdis Dombrovskis said here Friday that there would be dramatic consequences if adjustments to Portugal's pension system were not made soon.

"It is necessary to make the necessary adjustment and the sooner it is done, the smoother it will be. If the adjustment is delayed, a more dramatic approach will be required," he told a news conference.

Dombrovskis said the European Commission advised Portugal to lower the budgetary deficit to below 3 percent but did not give details regarding the government's plan to save 600 million euros in the pensions system.

Portuguese Minister of Finance Maria Luis Albuquerque refused on Friday to discuss whether the reforms in the pension system would lead to further cuts in pensions.

"There is an objective for an outcome of 600 million euros (about 678 million U.S. dollars). The combination of possible measures on the revenue side and on the expenditure side is still open to discussion," Albuquerque said.

Dombrovskis said he had been informed by the Portuguese government on its plans regarding the pension system, after the court last year turned down the government's bid to cut public sector pensions, forcing the government to find other alternatives to keep the budget on track.

The Portuguese government has been implementing a harsh austerity policy to meet the deficit reduction target under a 78-billion-euro bailout program it signed in 2011 with the troika of international lenders, namely the European Commission, the International Monetary Fund and the European Central Bank.

The government which faces a general elections in October this year continues to implement the austerity policy though the country exited from the bailout program in May last year. (1 euro = 1.13 U.S. dollars) Endit