LISBON: The IMF has identified 4 billion euros of possible spending cuts in Portugal, focused on large-scale layoffs of public sector workers and reductions in pensions, business daily Jornal de Negocios said on Wednesday.
Lisbon plans to shave 4 billion euros off its spending bill in 2013-14 to help make public sector finances sustainable in the long term and has asked the International Monetary Fund to help identify where the cuts should fall.
The aim is to prepare the country's public sector for the expiry of its 78-billion-euro bailout from the European Union and IMF.
Under the rescue plan, Portugal is scheduled to return to financing itself in the bond market in the second half of this year.
Jornal de Negocios said the IMF report, which will be discussed by the government in coming months, included a series of recommendations.
Among the possible cuts it outlines was a cut in civil servants of between 10 and 20 percent, which would save between 795 million and 2.7 billion euros.
The report also found that an across-the-board cut in pensions of 10 percent would save 2.3 billion euros, although it identified various alternatives, including only cutting future pensions which would save 600 million euros.
With opposition to Portugal's bailout rising sharply in recent months, any of the proposed cuts would most likely be met with anger by the Portuguese, who fear their welfare state is already being eroded by austerity measures.
The IMF also identified unemployment benefits as a possible source of savings, proposing cutting their amount and the time over which they are paid to the jobless.
indiatimes.com
Lisbon plans to shave 4 billion euros off its spending bill in 2013-14 to help make public sector finances sustainable in the long term and has asked the International Monetary Fund to help identify where the cuts should fall.
The aim is to prepare the country's public sector for the expiry of its 78-billion-euro bailout from the European Union and IMF.
Under the rescue plan, Portugal is scheduled to return to financing itself in the bond market in the second half of this year.
Jornal de Negocios said the IMF report, which will be discussed by the government in coming months, included a series of recommendations.
Among the possible cuts it outlines was a cut in civil servants of between 10 and 20 percent, which would save between 795 million and 2.7 billion euros.
The report also found that an across-the-board cut in pensions of 10 percent would save 2.3 billion euros, although it identified various alternatives, including only cutting future pensions which would save 600 million euros.
With opposition to Portugal's bailout rising sharply in recent months, any of the proposed cuts would most likely be met with anger by the Portuguese, who fear their welfare state is already being eroded by austerity measures.
The IMF also identified unemployment benefits as a possible source of savings, proposing cutting their amount and the time over which they are paid to the jobless.
indiatimes.com
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