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Portugal Finance Minister Vitor Gaspar resigns

Vitor Gaspar has resigned his post as Portugal's widely reviled finance minister. Critics have singled him out as one of the key driving forces behind the country's harsh austerity policies.

The office of the presidency announced Gaspar's departure on Monday. Treasury Secretary Maria Luis de Albuquerque is to become Portugal's new finance minister, according to the government statement.

Critics of Finance Minister Gaspar had blamed him for the country's ailing economy due to his unyielding support for deep-cutting austerity measures. However, it was not immediately clear whether widespread discontent had driven the finance chief from his post.

The announcement from President Anibal Cavaco Silva's office came as the Portuguese government prepares to host its international creditors in Lisbon. Representatives from the European Union and the International Monetary Fund (IMF) are scheduled to conduct a review of the debt-stricken country's fiscal progress in July before deciding on the release of the next tranche of bailout money.

Since being granted a 78-billion-euro ($102-billion) rescue package from international lenders in 2011, Lisbon has approved tax hikes and massive tax cuts in order to comply with the terms of the bailout.

Critics have decried the austerity measures, blaming them for the skyrocketing unemployment, which is projected to surprise 18 percent in the coming year, and Portugal's third year of recession.

Lisbon recently approved new spending cuts which included reduced spending on public sector goods and services, an extension of working hours and a delay in the retirement age from 65 to 66. Despite being forced by the Constitutional Court to scrap measures which would have reduced certain public sector perks, such as a reduction in holiday bonuses, the government said it was still confident it could reach the budget deficit target of 5.5 of the GDP this year.

The Portuguese economy is expected to contract by another 2.3 percent this year.

kms/ (AP, AFP, Reuters, dpa)