During the week following Easter the Troika suits will be back in Lisbon to complete their last official visit in the review of Portugal's 'Programme for Economic and Financial Assistance.'
Key topics scheduled for the 12th review of Portugal’s still struggling finances include the replacement of the ‘temporary’ cuts in salaries and pensions by more permanent tax raising measures.
Finance Minister Maria Luís Albuquerque informed the Council of Ministers yesterday that the Troika would also be looking ahead to Portugal's taxation plans for 2105, but concerning the immediate unpopular move against pensioners - “most likely we will be able to announce the permanent measures that are to be studied and analyzed."
The possible replacement of the current temporary cuts in public sector wages and pensions with permanent cuts is the hot topic in Lisbon and one that Alberquerque is well aware may cause political damage if the word ‘temporary’ is simply replaced with ‘permanent,’ as the opposition has claims for months that it will be.
The government is in danger of losing any vestiges of support it retains if Albuquerque takes the easy option over pensions and maintains the temporary 'solidarity tax' where impotent state pensioners are shouldering the cuts.
The 12th review will also look at how Portugal exits from the support programme in the next few weeks, whether cleanly like Ireland, or with a degree of continuing support from international creditors.
Letting slip his opinion last night on SIC the Prime Minister said he was looking at restoring part of the salary and pension cuts, but not until 2016.
Pedro Passos Coelho added that a lasting solution will be presented by the end of this month to replace the extraordinary cuts, and that he doesn’t plan to reduce income tax.
The Government announced also that it is to implement cuts across Ministries of a further €1,400 million in 2015 to meet this year’s deficit target of 2.5%. At a press conference following the extraordinary meeting of the Council of Ministers, Maria Luís Albuquerque said that the government has identified savings of up to €180 million by "reducing the number of civil servants, but only through retirement and agreed redundancies” – hardly the hard-hitting cuts in the civil service promised time and time again, but to date largely undelivered.
