Open

Coming up

Don't miss

Replay


LATEST SHOWS

AFRICA NEWS

Search of Air Algerie crash site continues

Read more

MEDIAWATCH

Sarkozy, Hollande and the scooter wars

Read more

MEDIAWATCH

Confusion online over Air Algérie flight

Read more

THE WORLD THIS WEEK

The World This Week - July 25th, 2014 (part 2)

Read more

THE WORLD THIS WEEK

The World This Week - July 25th, 2014

Read more

REPORTERS

Halal tourism on the rise

Read more

ENCORE!

Tunisia's Carthage International Festival turns 50

Read more

FRANCE IN FOCUS

WWI Centenary: the battle for Verdun

Read more

THE BUSINESS INTERVIEW

When big companies want to do good

Read more

  • Hamas opens fire on Israel despite offer to extend humanitarian truce

    Read more

  • Photos: Youths clash with police at banned Gaza protest in Paris

    Read more

  • Bodies of all Air Algérie crash victims to be brought to France

    Read more

  • Germany's Tony Martin wins 20th stage of Tour de France

    Read more

  • Kidnapped Briton freed after five months' detention in Yemen

    Read more

  • US evacuates embassy in Libya amid militia clashes

    Read more

  • Kerry in Paris for new round of Gaza ceasefire talks

    Read more

  • Nibali rides serenely toward a place in Tour history

    Read more

  • Video: 'Lack of security' at MH17 crash site, FRANCE 24 reports

    Read more

  • In pictures: Devastation, debris at Air Algérie crash site

    Read more

  • Washington Post reporter and his wife arrested in Iran

    Read more

  • French families grieve for Algerian plane crash victims

    Read more

  • Lithuania’s Navardauskas wins 19th stage of Tour de France

    Read more

  • LA Times wipes France off the map in air crash infographic

    Read more

  • Fans electrify the mood as Tour de France crosses the Pyrenees

    Read more

  • French lawyer files complaint against Israel at ICC

    Read more

  • Protest against Gaza offensive turns deadly in West Bank

    Read more

Europe

Portugal government reverses stance on tax hike

Latest update : 2012-09-22

In a sudden reversal, Portugal’s government has agreed to explore alternative solutions to a social security tax hike, a measure that sparked the worst public backlash to austerity the country has seen since negotiating an EU/IMF bailout last year.

In an about-face, Portugal’s government has agreed to negotiate alternative solutions to a social security tax hike that sparked the worst backlash to austerity since last year’s EU/IMF bailout, an official statement said on Saturday.

After an eight-hour meeting of the presidential state council that was besieged by protesters and ended long after midnight on Saturday, the council said the negotiations would now proceed between the government, unions and employers.

On Friday, Prime Minister Pedro Passos Coelho promised to “listen to the country” after huge street protests last weekend and criticism of the plan by unions and business leaders alike. He had previously only agreed to “calibrate” the measure.

The plan to raise the contributions in 2013 to 18 percent from 11 percent has undermined a reluctant acceptance of austerity in Portugal, increasing pressure on the government as it strives to meet the strict conditions of the bailout.

“The council was informed of the government’s readiness to study, within the framework of the social bargaining process, alternatives to changes in the social security rate,” the statement said after the council meeting.

It also said that “difficulties that could affect the solidity of the ruling coalition have been overcome”, confirming earlier statements by the two centre-right coalition partners that they remained committed to the bailout’s targets. Junior coalition partner CDS-PP is traditionally against tax hikes.

Thousands of protesters gathered next to the presidential palace where President Anibal Cavaco Silva’s met with his council—the consultative body made up of senior political figures, including Prime Minister Pedro Passos Coelho.

They demanded the government’s resignation and chanted, “Thieves, thieves!”

Over a hundred stayed until the end of the meeting and booed the council members as they left.

Expresso weekly newspaper said in its weekend edition the premier had decided to abandon the measure, which had irritated workers because it simultaneously reduced social security contributions by companies, but was preparing a new cut in holiday subsidies for workers instead to meet tough fiscal goals of the bailout.

Some analysts say the badly-devised attempt to hike the social security levy will make additional austerity measures harder to swallow now despite the government’s retreat and strife is likely to grow especially since Portugal’s economic recession is now expected to continue next year.

Portugal has entered its worst recession since the 1970s as it labours under sweeping tax increases and spending cuts, with the centre-right government’s popularity slumping to an all-time low after it announced the tax changes.

(REUTERS)

Date created : 2012-09-22

  • SPAIN

    Spaniards, Portuguese stage mass anti-austerity rallies

    Read more

  • EUROPE

    Portugal feels sting as EU creeps near recession

    Read more

  • Portugal

    Portuguese rally against austerity measures

    Read more

COMMENT(S)