Portugal's government faces a no-confidence motion on Wednesday, brought by opposition Socialists amid mounting unhappiness with the country's austerity measures.
Although the motion is almost certain to be defeated by the ruling coalition, which enjoys a comfortable majority, the move exposes growing dissent over the austerity policies imposed on Portugal since it received a €78bn international bailout agreed in May 2011.
"The time has come to put an end to the austerity policies that are impoverishing our country and demand heavy sacrifices from the Portuguese people without them seeing any results," the Socialist Party said in the motion.
The Socialists were in power when Lisbon sought the bailout but they now accuse Prime Minister Pedro Passos Coelho's government of an "excess of austerity", which they blame for worsening the recession and unemployment.
According to official forecasts, the Portuguese economy will shrink by 2.3pc this year and the unemployment rate, now at 16.9pc, will climb to 18.2pc. Last month, Portugal won an extra year from its creditors to bring down its public deficit in line with EU regulations.
The government now targets a deficit of 5.5pc of gross domestic product (GDP) in 2013.
Portugal's economically troubled neighbour, Spain, should start to see the benefits of the country's reform programme next year, according to the prime minister. Mariano Rajoy said on Wednesday that in 2014, Spaniards would start to "see tangible results from the sacrifices they've made".
He also called for Europe to adopt growth policies to balance austerity, issuing a veiled demand for Germany to boost spending.
"Countries that can afford it should spend more," he said, a code he has used in the past to call on Germany, the only big European country with spending capacity, to implement more expansive fiscal policies. "Europe is the only region in the world in recession.
To overcome this situation we need three things: every country needs to do its homework, we need more [European] integration and we need growth policies," he added. While Spain is hoping that its economy will grow next year, Italy indicated on Wednesday that its economy is likely to shrink more severely than thought this year.
Treasury undersecretary Gianfranco Pollilo said that Italy's economy could contract by 1.5pc or 1.6pc, more than the government forecast just two weeks ago.
As recession-plagued eurozone nations struggle to kick-start their economies, the European Commission's president said on Wednesday that the European economies had got through the worst of the debt crisis; but, he added that the situation remained delicate.
Jose Manuel Barroso said during a visit to Prague: "I believe that the EU has come through the worst of the crisis but the situation is still fragile."
telegraph.co.uk
Although the motion is almost certain to be defeated by the ruling coalition, which enjoys a comfortable majority, the move exposes growing dissent over the austerity policies imposed on Portugal since it received a €78bn international bailout agreed in May 2011.
"The time has come to put an end to the austerity policies that are impoverishing our country and demand heavy sacrifices from the Portuguese people without them seeing any results," the Socialist Party said in the motion.
The Socialists were in power when Lisbon sought the bailout but they now accuse Prime Minister Pedro Passos Coelho's government of an "excess of austerity", which they blame for worsening the recession and unemployment.
According to official forecasts, the Portuguese economy will shrink by 2.3pc this year and the unemployment rate, now at 16.9pc, will climb to 18.2pc. Last month, Portugal won an extra year from its creditors to bring down its public deficit in line with EU regulations.
The government now targets a deficit of 5.5pc of gross domestic product (GDP) in 2013.
Portugal's economically troubled neighbour, Spain, should start to see the benefits of the country's reform programme next year, according to the prime minister. Mariano Rajoy said on Wednesday that in 2014, Spaniards would start to "see tangible results from the sacrifices they've made".
He also called for Europe to adopt growth policies to balance austerity, issuing a veiled demand for Germany to boost spending.
"Countries that can afford it should spend more," he said, a code he has used in the past to call on Germany, the only big European country with spending capacity, to implement more expansive fiscal policies. "Europe is the only region in the world in recession.
To overcome this situation we need three things: every country needs to do its homework, we need more [European] integration and we need growth policies," he added. While Spain is hoping that its economy will grow next year, Italy indicated on Wednesday that its economy is likely to shrink more severely than thought this year.
Treasury undersecretary Gianfranco Pollilo said that Italy's economy could contract by 1.5pc or 1.6pc, more than the government forecast just two weeks ago.
As recession-plagued eurozone nations struggle to kick-start their economies, the European Commission's president said on Wednesday that the European economies had got through the worst of the debt crisis; but, he added that the situation remained delicate.
Jose Manuel Barroso said during a visit to Prague: "I believe that the EU has come through the worst of the crisis but the situation is still fragile."
telegraph.co.uk
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