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Business

Portugal lawmakers signal approval of 2014 austerity budget

Portuguese lawmakers supporting Prime Minister Pedro Passos Coelho have thrown their weight behind the government's draft budget for next year. It envisages the harshest cuts in decades.

In a first reading in the Portuguese parliament on Friday, legislators from the ruling center-right coalition backed Prime Minister Pedro Passos Coelho's draft budget bill for 2014, saying there was no alternative to harsh spending cuts. A final vote was expected by the end of November.

The 2014 budget foresees cuts of about 4 billion euros ($5.4 billion), with media reports claiming the decline in spending would be the most severe one in more than 45 years.

The government insisted on cuts in civil servants' salaries, the number of public employees, pensions and health spending while raising some indirect taxes to meet the bailout terms set by the European Union and the International Monetary Fund.

The two lenders granted Portugal a 78-billion-euro rescue fund in 2011, with the nation due to wrap up its bailout program and to return to refinancing markets in mid-2014.

Coelho's supporters have a comfortable majority in parliament, making a final "yes" to the draft budget look like a mere formality despite hefty criticism from the opposition benches.

Budget cuts denounced

Thousands of protesters had gathered outside the parliamentary building in Lisbon to denounce the budget, saying the social repercussions of the planned cuts would be devastating.

Their protest action coincided with All Saints' Day, which had traditionally been a Portuguese holiday until this year when austerity measures reinstated it as a working day along with three other dates.

hg/dr (dpa, AFP)

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