The Portuguese government approved around 800 million euros of new spending cuts on Thursday to put its EU/IMF bailout back on track after some of its austerity plan was thrown out by the constitutional court.
Budget Secretary Luis Sarmento told a news briefing after an all-night cabinet meeting that the latest cuts and some other measures would allow Lisbon to meet this year’s budget deficit target of 5.5 percent of gross domestic product and secure the next 2 billion euro tranche of its bailout.
The government will hope its new plan is resistant to fresh court challenges, but the cuts could still stoke public anger which brought hundreds of thousands of people onto the streets last month in opposition to austerity.
Keeping Portugal on course for a full return to the debt markets is an important goal for the euro zone, which has seen its path out of crisis blocked in recent months by a political stalemate in Italy and a financial collapse in Cyprus.
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