The IMF has told Portugal that the draconian austerity budget it has passed for 2013 will not be enough and has asked for more austerity. Portugal needs to make up a 4 billion euro gap and to do so the IMF wants to see cuts to government salaries, cuts to the government pension plan and a reduction in headcount.
Just as a recap here, let's remember that the fiscal cliff in the US is nothing compared to the severity of tax increases and budget cuts the Portuguese government is enacting. In fact, the tax increases are the highest in Portuguese history.These measures have been very unpopular and has taken a toll on support for the government. Nonetheless, the government feels it is necessary if it wants to be in a situation similar to Ireland, with capital market access, looking to exit the...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.