Government throttles back on spending and introduces new cuts

New cuts are needed if Portugal is to close this turbulent year within its deficit targets.

Finance minister Mário Centeno – the man who only last month declared austerity was over – has now conceded that new cuts have to be made and spending must be curtailed. But he stresses that the measures won’t be at the cost of taxpayers, writes Diário de Notícias.

All the “additional measures” (and he hasn’t fully explained what these are) will come from reducing government expenditure, not from increasing receipts from Joe Public.

“It will be difficult and demanding”, Centeno told a press conference in Lisbon.

The news follows warnings by UTAO (the budgetary support unit) that the so-called financial cushion talked about by the last government had depleted in the run-up to the elections to the size of a very small pocket handkerchief.

At issue now is a hole of around €500 million, claims Centeno, and the PS affirm they are on to it.

The new finance minister’s first line of attack is to put a freeze on money to be released to ministers, explains DN. The second is to “reduce public administration funds” and the third is “not to assume any more financial obligations that are not urgent”.

As pundits have remarked, Centeno is not exactly heavy on the detail.

Meantime, there is no news on the date when Portugal’s long overdue 2016 State Budget will be ready – and the Bank of Portugal has revised its immediate forecasts for growth downwards as a result.

natasha.donn@algarveresident.com