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Portuguese parliament passes public sector wage cut

The Portuguese parliament on Friday (25 July) passed new public sector wage cuts in a bid to meet its target of reducing the deficit.

LISBON: The Portuguese parliament on Friday (25 July) passed new public sector wage cuts in a bid to meet its target of reducing the deficit. The law allows for a temporary reduction of between 3.5 and 10 per cent on salaries of more than EUR1,500 (US$2000) a month.

The passing of the law was met with protests outside parliament, organised by the country's main trade union confederation.

"No to wage theft," read some of the banners. "We all know that these measures are unconstitutional," said Armenio Carlos, general secretary of the General Confederation of Portuguese Workers (CGTP).

The law was voted through by the governing centre-right coalition, which has a comfortable majority in parliament. The entire leftist opposition voted against it.

The wage cuts would be reduced by 20 per cent by 2015 and phased out over the next five years.

In May, Portugal's constitutional court rejected austerity measures included in Lisbon's 2014 budget as part of the centre-right government's ongoing cutbacks, as it hopes to reduce its deficit to four per cent of gross domestic product (GDP).

Portugal exited a three-year international bailout programme in May, after receiving 78 billion euros (US$106 billion) from the European Union and the International Monetary Fund in exchange for a series of stringent reforms in the country.

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