Lisbon announces harsher austerity plans

Portugal’s Prime Minister Pedro Passos Coelho announced new austerity measures on the 7 September 2012 involving a sharp cut in take-home pay for private and public sector workers designed to keep the country on track to comply with its €78bn bailout programme.

In a televised address, Mr Coelho said that the social security contributions deducted from employees’ wages would increase from 11 to 18% in 2013.

Opposition parties and trade unions vehemently condemned the new measures. Accusing the prime minister of being 'obsessed with austerity', Carlos Zorrinho, a senior Socialist party official, said the package would deepen the country’s recession and increase unemployment.

ESO: Background information: Tax fall imperils Lisbon’s deficit target http://www.europeansources.info/record/tax-fall-imperils-lisbons-deficit-target/

Reuters, 8.9.12: Portugal PM says to raise workers' social security levy http://in.reuters.com/article/2012/09/07/portugal-bailout-idINL6E8K7FHP20120907

IMF: Country Information: Portugal: Fast Facts http://www.imf.org/external/np/exr/countryfacts/prt/index.htm

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