Portugual to reduce state-owned economy, cut spending

13:40, June 29, 2011      

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The new center-right Portuguese government proposed on Tuesday to further slash the state-owned economy and cut spending to lift the country out of its debt crisis.

The new proposals are part of the country's efforts to implement austerity targets agreed in a 78-billion-euro (112 billion U.S. dollars) bailout plan reached with European Union and the International Monetary Fund.

Prime Minister Pedro Passos Coelho pledged to "apply scrupulously the measures negotiated with the International Monetary Fund and the European Union," but said he wanted to adjust the economy more ambitiously.

The government plans to sell its stakes in the energy company EDP, the National Electricity Network, the airline TAP and the BPN bank, and privatize the public railway company.

The government has tried to cut spending by reducing the number of ministries from 16 to 11 and trimming administrative cost. It intends to scale down the budget deficit from 9.1 percent in 2010 to 5.9 percent this year.

It has also halted the high speed railway project linking Lisbon and the Spanish capital Madrid.

Meanwhile, all public-private partnerships will be revaluated and those that cause deficit could be extinguished. Civil servants will be invited to leave the public service with reparation.

Source: Xinhua
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