The IMF/EU/ECB Troika has praised the success of Portugal’s cost-cutting programme and has approved the next tranche of €8 billion.
Portugal applied for a €78 billion bailout package in April following the fall of the Socialist PS government of José Sócrates.
The Troika acknowledged that the Government’s programme had suffered alterations, but said that, overall, Portugal was on track to bring down its budget deficit to limits agreed by the international organisations.
It also admitted that the “worse was yet to come” in terms of the sacrifices the population would have to make.
The three representatives from the European Commission, International Monetary Fund and European Central Bank also stated that there was “no alternative” to cutting holiday and Christmas subsidies within the public administration and even said that the cuts needed “to be replicated in the private sector”.
“To achieve the end of improving labour cost competitiveness, private sector salaries should follow the example of the public sector and apply sustained reductions (to holiday subsidies”, stated a communiqué.
It was the second quarterly progress report given by the ‘Troika’ and its representatives Jürgen Kröger (CE), Poul Thomsen (FMI), and Rasmus Rüffer in the Lisbon branch office of the European Union.
However, they did not give detailed explanations as to how the Government should proceed on changing the Employment Code.
Under the terms of current Portuguese law, salaries can only be reduced with a proportional reduction in working hours or in the type of work. C.G.