Portugal Readies Budget With Job Cuts and Tax Increases
Portugal has long been regarded a role model in the grinding euro zone crisis. In return for an international bailout, its government cut services and raised taxes while its citizens patiently endured with little of the popular outcry seen elsewhere in southern Europe.
Suddenly, the Portuguese, too, have joined the swelling ranks of Europe’s discontented, following Greece and Spain, after the government tried to take another step up the austerity path last month. For many here, it was one step too far, driving tens of thousands into the streets in the largest protest of Portugal’s crisis.
As Pedro Passos Coelho, Portugal’s center-right prime minister, prepares to announce a new budget on Monday — filled with still more steep tax increases and public sector job cuts — he faces the kind of popular backlash that was, until recently, absent from the political and social landscape here.
Taking a page from the playbook of their Spanish neighbors, Portuguese protesters are planning to encircle the Parliament building here in the capital for the budget announcement. For their part, Portugal’s powerful trade unions are preparing a general strike for Nov. 14. Arménio Carlos, the leader of the CGTP union, compared Mr. Passos Coelho to Pinocchio, accusing him of constantly changing his austerity message.
“It’s clear that the amount of good faith the government enjoyed has been turned into large skepticism and distrust,” said Pedro C. Magalhães, a professor of politics at the University of Lisbon.
For a government that has assiduously followed the belt-tightening prescriptions of its international lenders — who rewarded Portugal with a 78 billion euro ($101 billion) bailout — it has been a rude awakening to the risks of austerity, which has even strained the governing coalition of Mr. Passo Coelho’s Social Democrats and the rival Popular Party.
Many here say the government has taken the population’s compliance for granted.