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Creditors submit Portugal's austerity plan to test

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Photo -   Portugal's Prime Minister Pedro Passos Coelho addresses to the nation at Lisbon's Sao Bento palace, the premier's official resident, Friday, May 3, 2013. Passos Coelho said he plans to raise the retirement age to 66 from 65 and lay off some 30.000 government workers in measures that aim to save 4.8 billion euros (USD6.3 billion) over the next three years. The premier claimed the new austerity measures are needed to ensure Portugal won't need another bailout. (AP Photo/Francisco Seco)
Portugal's Prime Minister Pedro Passos Coelho addresses to the nation at Lisbon's Sao Bento palace, the premier's official resident, Friday, May 3, 2013. Passos Coelho said he plans to raise the retirement age to 66 from 65 and lay off some 30.000 government workers in measures that aim to save 4.8 billion euros (USD6.3 billion) over the next three years. The premier claimed the new austerity measures are needed to ensure Portugal won't need another bailout. (AP Photo/Francisco Seco)
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LISBON, Portugal (AP) — Inspectors from Portugal's bailout creditors are returning to Lisbon to assess whether the government's latest austerity measures merit unblocking a due disbursement of rescue funds.

Portugal's 78 billion euro ($102 billion) bailout two years ago spared the country from bankruptcy, but in return it must slash spending and debt.

In what was seen as a warning over lack of compliance, the bailout lenders last month halted payouts after Portugal's Constitutional Court disallowed some of the government's pay and pension cuts.

The government drew up alternative measures and last week announced plans to cut another 4.8 billion euros over three years.

Austerity policies are broadly contested, and splits have emerged inside the center-right coalition government.

The Finance Ministry said in a statement the inspectors will be back in Lisbon on Tuesday.

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