Portuguese PM promises no further pension cuts in 2017

Portuguese Prime Minister Antonio Costa on Wednesday vowed to make no cuts to pensions in the state budget for 2017 and said he would eliminate current cuts.

He also said he would focus on investment in education, health and culture.

"The state budget for 2016 included restoring salaries," Costa told journalists after welcoming the country's Paralympic delegation at the former coach museum in Lisbon.

"The budget for 2017 must also have that objective, while also including investment in fundamental policies like education, health, culture, which are decisive for our collective future and in order to pursue a strategy of greater fiscal justice," he added.

Costa came into power last year after Portugal's pro-austerity government was ousted, promising to "turn the page of austerity" by raising wages and boosting growth.

Measures he introduced include restoring workers' pay, increasing pensions and cutting tax for families with lower incomes.

His Socialist Party, which is backed by the Left Bloc and Communist Party, is aiming for a budget deficit target of 2.2 percent this year from 3.1 percent last year. He hopes the economy will grow 1.8 percent from 1.5 percent last year.

European officials and former politicians have expressed concern regarding Costa's plans, with the country's former finance minister Maria Luis Albuquerque claiming Tuesday that the country risked a second bailout if the country maintained its current macroeconomic policies.

The government in power insists that the economy will be strengthened while abiding by fiscal rules. Endit