Social

Home page

Social

Working hours increased for 30 minutes in Portugal

14 October 2011 14:50 (UTC +04:00)

Baku - APA-Economics. Portuguese employees will have to work longer, lose bank holidays and forfeit more than a monthâ€™s wages in holiday bonuses to combat pressures to leave the euro, the prime minister announced on Thursday night.

In a televised address to the nation, Pedro Passos Coelho outlined the countryâ€™s toughest austerity package to date in an effort to avert what he described as a â€œnational emergencyâ€.

The measures, to be included in the centre-right governmentâ€™s budget proposals for 2012, were essential to comply with Portugalâ€™s â‚¬78bn ($108bn) bail-out agreement with the European Union and International Monetary Fund, the prime minister said.

Economists said the measures, together with earlier cuts, would reduce public sector wages and pensions by about 20 per cent compared with 2010.

Manuel Carvalho da Silva, head of the countryâ€™s biggest trade union confederation, urged workers to resist the cuts, signalling an increase in labour unrest, which has so far remained relatively low key in Portugal.

Working hours for private sector employees would be increased by 30 minutes a day without extra pay, the prime minister said. Some bank holidays would be abolished and others moved permanently to Mondays.

Bonuses equivalent to one monthâ€™s pay, which most Portuguese workers receive in the summer and at Christmas, would be abolished for employees earning more than â‚¬1,000 a month and reduced for most others he said.

The longer working hours and bonus cuts will apply only in 2012 and 2013, when Portugal hopes to return to financial markets to finance its sovereign debt.

Mr Passos Coelho said substantial cuts would also be made in government spending on health and education. Many tax benefits would be abolished and value added tax increased on many products.

Portugal faced â€œfinancial strangulationâ€, he said. The country was dependent on bail-out funds from the EU and IMF to â€œpay nurses, teachers and the policeâ€ as well as welfare benefits.

If the country failed to meet fiscal targets agreed with the EU and IMF, the economy would enter a downward spiral that would â€œparalyseâ€ the state, he added.

The prime minister said the extra measures were needed because the budget deficit had reached 70 per cent of the annual target for 2011 at the end of June.

Portugal is committed to cutting its deficit from 9.8 per cent of gross domestic product last year to 5.9 per cent in 2011 and 4.5 per cent in 2012.

A harsher recession than forecast â€“ with economic growth expected to shrink 1.9 per cent this year and 2.2 per cent in 2012 â€“ would also make it harder to meet the fiscal goals agreed with the EU and IMF, the prime minister said.

â€œI never thought I would have to take such severe measures,â€ said Mr Passo Coelho, whose centre-right coalition government took office in June. â€œWe should never have reached this point.â€

The government is supported by a substantial majority in parliament, virtually guaranteeing approval of the budget proposals. The centre-left socialists, the main opposition party, negotiated the bail-out package with the EU and IMF and are not expected to vote against the budget.