Portugal’s Finance Minister Vitor Gaspar has said the country’s bailout lenders have agreed to ease its debt-reduction targets amid deteriorating economic prospects.
Gaspar also warned that fully restoring the country’s financial health will take decades and the efforts of a generation. The Minister had a grim assessment of Portugal’s record under the bailout program. He reported that the Portuguese economy contracted 3.2 percent last year and is forecast to shrink another 2.3 percent in 2013, marking its 3rd straight year of recession. He said the unemployment rate, currently at a record 17.2 percent, is expected to climb to 18.5 percent by 2014.
The steep downturn has brought calls from business leaders, trade unions and opposition parties for the government to shift its efforts away from spending cuts and toward encouraging growth. But Gaspar insisted Portugal is on the right path and will stick with austerity.
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