ECB: Mario Draghi discards easing portugal`s bailout terms
Baku, February 21 (AzerTAC). The European Central Bank`s president said that rather than slowing down the pace of budgetary efforts, it was necessary to mitigate the effects.
President of the European Central Bank Mario Draghi discarded the possibility of easing Portugal`s bailout terms on Monday saying it would “ruin” the sacrifices endured by the Portuguese.
Draghi said that rather than slowing down the pace of budgetary efforts, it was necessary to mitigate the effects that the current belt-tightening measures are having in the real economy, including a steep contraction in consumer spending and escalating unemployment.
If adjusting circumstances means mitigating the budgetary consolidation, that`s not what we mean,” he said. “What we mean is that it`s necessary to mitigate the consequences. Weakening the budgetary consolidation risks losing the effects that great sacrifices have achieved,” he said.
According to Draghi, a solution to mitigate the effects of the consolidation was to “focus on the reduction of expenditure rather than on increasing taxes.”
Draghi said this in response to a question posed by Socialist MEP Elisa Ferreira during the debate at the European Parliament’s Economic and Monetary Affairs Committee, regarding the possibility of the so-called troika of international lenders - International Monetary Fund, European Central Bank and European Commission - adapting the programme to the country’s current circumstances.
Tension is escalating in Portugal, with several thousand people hitting the streets last Saturday to protest against the government`s insistence on austerity to help the debt-laden country out of the recession.
Portugal is plunged in its deepest recession since 1975 as the country continues to implement harsh austerity measures under its €78bn bailout programme, with the unemployment rate hitting a record high of 16.9% in the fourth quarter of 2012.
Draghi acknowledged that adjustment programmes had to be adapted to each country but said this did not mean that the pace of Portugal’s adjustment should be altered.
Other news in this section
