Portuguese Prime Minister Pedro Passos Coelho has tabled the most austere budget since the return of democracy to the country in 1974. “Lower wages and higher taxes to prevent the collapse of the welfare state,” announces Público.“Almost a million people will lose holiday and Christmas benefits,” which represent a 13th and a 14th month's salary, leads the Lisbon daily. Working hours in the private sector will go up, public holidays will be fewer, VAT will go up and there will a reduction in income tax discounts. Passos Coelho has justified these “painful” measures for the fiscal slippage of three billion euros in order to reverse Portugal’s “downward economic spiral”.
“The country has witnessed one of the most important and dramatic messages of recent years,” Público confirms in an editorial. “The prime minister has confirmed to the Portuguese that the battle they have waged has gone well beyond merely outracing a financial crisis. The issue now is the collapse of the country.”