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During 2011 and 2012, Portugal cut welfare spending by €3.7bn, almost equal to the €4bn in additional cuts that the Troika and government want to see slashed from public spending in 2013 and 2014.
Although the country is below the European average for social spending as a proportion of Gross Domestic Product (GDP), the worsening recession seems to have taken spending cut plans by the government and Troika – made up of the European Central Bank, European Union and International Monetary Fund – “by surprise".
The Troika’s seventh review of the Portuguese bailout agreement, which started on February 25 and will last for about two weeks, will be marked by an attempt by Lisbon to soften the terms of the austerity, in order to stem the rise in unemployment and prevent the country plunging into a recessionary spiral.
