Portugal unveils sharp rise in taxes
Baku, October 17 (AZERTAC). Portugal`s government braced for more public backlash against its austerity program after it unveiled a budget proposal for 2013 that centered on sharp tax increases.
The document was the product of torturous preparation that included backtracking on core policy decisions and cabinet meetings lasting up to 20 hours, as the government struggled to find a balance between austerity and social and political stability. As Finance Minister Vitor Gaspar delivered the budget plan to Parliament on Monday, that balance seemed elusive.
About 1,000 demonstrators gathered outside the Parliament building and chanted, "The people united will never be defeated." Their numbers grew into the evening.
The main budget provisions, outlined earlier this month, had drawn criticism from labor unions, opposition parties and members of former governments, who said the further belt-tightening will suffocate the middle class and small companies.
"This is a fiscal atomic bomb," said António José Seguro, head of the Socialist Party, the largest opposition group. He has said the party will vote against the plan.
While Prime Minister Pedro Passos Coelho`s coalition has majority in Parliament, its popularity is falling fast. A nationwide poll conducted this month showed almost 70% of Portuguese don`t trust the government. Close to 53% said the government will be forced to resign before its term ends in 2015, while 33% said it would finish its mandate.
Public discontent has shot up in an otherwise calm country since Mr. Passos Coelho announced last month that the budget would include a cut in labor costs for companies funded by an increase in workers` social security contributions.
Following the largest street protest in decades and strong criticism even by members of the government`s coalition parties, Mr. Passos Coelho dropped the plan, saying taxes would be increased instead.
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