LISBON: Portugal's parliament gave final approval on Tuesday to a 2013 budget which promises a third year of recession and the biggest tax hikes in modern history to ensure international bailout terms are met.
Lawmakers from the ruling Social Democrats and their junior coalition partners from the rightist CDS voted for the bill, ensuring passage thanks to their parliamentary majority, but all the other parties vote against.
"The government is aware of the difficulties we have to overcome," Finance Minister Vitor Gaspar told parliament before the vote.
A few thousand protesters gathered outside parliament to oppose the bill, which far-left opposition lawmakers have promised to challenge in the country's constitutional court.
The main opposition Socialists voted against the budget in the most concrete sign yet that the consensus that existed in Portugal surrounding the bailout has now vanished.
It was a Socialist government that first sought the bailout for Portugal in 2011 and last year it abstained in the budget vote.
"The country needs a budget to get out of the crisis, instead it will get a budget that deepens the crisis," Socialist leader Antonio Jose Seguro told parliament.
"These tax increases represent a fiscal nuclear bomb for the Portuguese." The budget aims to cut the budget deficit to 4.5 percent of GDP next year from 5 percent this year.
It envisages a 1 percent decline in gross domestic product, which many economists think is far too optimistic, after this year's slump of 3 percent.
Tax revenues fell short this year, undermined by the worst recession since the 1970s.
Still, the government is hoping that the sharp tax hikes in 2013 will guarantee sufficient income to meet budget goals.
indiatimes.com
Lawmakers from the ruling Social Democrats and their junior coalition partners from the rightist CDS voted for the bill, ensuring passage thanks to their parliamentary majority, but all the other parties vote against.
"The government is aware of the difficulties we have to overcome," Finance Minister Vitor Gaspar told parliament before the vote.
A few thousand protesters gathered outside parliament to oppose the bill, which far-left opposition lawmakers have promised to challenge in the country's constitutional court.
The main opposition Socialists voted against the budget in the most concrete sign yet that the consensus that existed in Portugal surrounding the bailout has now vanished.
It was a Socialist government that first sought the bailout for Portugal in 2011 and last year it abstained in the budget vote.
"The country needs a budget to get out of the crisis, instead it will get a budget that deepens the crisis," Socialist leader Antonio Jose Seguro told parliament.
"These tax increases represent a fiscal nuclear bomb for the Portuguese." The budget aims to cut the budget deficit to 4.5 percent of GDP next year from 5 percent this year.
It envisages a 1 percent decline in gross domestic product, which many economists think is far too optimistic, after this year's slump of 3 percent.
Tax revenues fell short this year, undermined by the worst recession since the 1970s.
Still, the government is hoping that the sharp tax hikes in 2013 will guarantee sufficient income to meet budget goals.
indiatimes.com
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