237 lines
5.9 KiB
Plaintext
Executable File
237 lines
5.9 KiB
Plaintext
Executable File
news
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worldnews
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europe
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portugal
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8160499
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-----
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# Portugal puts up fight against debt crisis
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## Portugal is to undertake a last ditch stand against a ruinous Irish-style
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debt crisis by convening parliament to a draconian austerity package.
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![Portugal puts up fight against debt crisis ][1]
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Jose Socrates minority socialist government has proposed a 2011 budget that
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will slash public sector pay by an average of 5 per cent Photo: EPA
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By Fiona Govan in Lisbon 8:16PM GMT 25 Nov 2010
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The crucial vote comes two days after workers downed tools in the biggest show
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of strength since Portugal's transition to democracy to protest against
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austerity measures that many fear will "bankrupt the country and destroy the
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economy".
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Portugal is struggling to slash its budget deficit from a high of 9.3 per cent
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last year to 7.3 per cent by end of 2010 and to further reduce it to 4.6 per
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cent during 2011.
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Prime Minister Jose Socrates minority socialist government has proposed a 2011
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budget that will slash public sector pay by an average of 5 per cent, raise
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taxes, freeze state pensions and reduce welfare benefits.
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But ahead of today vote lawmakers admitted that while the stringent belt-
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tightening offered the only hope of persuading international investors that
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Portugal would not need outside help it may not be in the best interest of the
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Portuguese people.
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"We are about to implement the harshest budget in the history of democratic
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Portugal and the effects on the people will be catastrophic," said Joao
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Galamba, an MP for the ruling socialist party.
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"We're being forced to implement measures that are economically irrational in
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a bid to please the markets. And the question is - are they actually looking
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or have they already made up their minds?"
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With the cost of insuring Portugal's sovereign debt against a default rocketed
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this week speculation mounted that the country would have to follow Greece and
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Ireland in seeking an international financial bail-out.
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Passage of the 2011 budget is virtually assured following a deal between the
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minority socialist government and the centre-right Social Democrats (PSD), the
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main opposition party.
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"After long negotiations we've agreed to abstain from the vote which ensures
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it will pass," said Paulo Mota Pinto, from the PSD and chairman of the Budget
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and Finance Committee. "It's a question of putting party politics aside and
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acting in the national interest."
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The strike failed to derail the government's budget cuts but it has come to
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symbolise the popular fear of job losses and cutbacks. "It's the workers that
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will end up paying for the mistakes of others," said Paulo Martins at a cafe
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in Lisbon's Barrio Alto. "We need policies that serve the Portuguese people
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foremost and not the bankers and investors."
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[What are these?][3]
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* Share: [Share][2] [ ][4] [ ][5]
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http://www.telegraph.co.uk/news/worldnews/europe/portugal/8160499/Portugal-
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puts-up-fight-against-debt-crisis.html
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Telegraph
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## [Portugal][7]
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* ### [News »][8]
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* ### [World News »][9]
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* ### [Europe »][10]
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In news
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[![A reveller performs during a parade at the Barranquilla's carnival in
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[![Artist Alexandre Farto creates portraits from bricks and mortar on
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buildings. ][13] ][14]
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region and claim the lives of two firemen][19] ][20]
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[X][2] Share & bookmark
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[What are these?][3]
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Share:
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* [ ][2]
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* [ ][4]
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* [ ][5]
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* [Tweet][6]
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* Advertisement
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![][21]
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## [Europe news »][10]
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[France news][22]
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[Russian news][26]
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[European Union][27]
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[Follow The Telegraph on Social Media »][28]
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