Portugal Eliminates Two Extra Payments to Staff and Pensioners and Increase Working Hours..

In a televised statement, the prime minister explained that Luso suppression ofsummer bonuses and Christmas, which runs until the end of 2013, will affect thewages of more than 1,000 euros per month for officials, employees of public companies and pensioners. He explained that the private sector also will restructure the holiday calendar to promote productivity….

These measures, included in the budget of 2012, are intended, according toPassos Coelho, correct budgetary slippages which endanger the commitments to the European Union (EU) and the International Monetary Fund (IMF), whichprovided 78,000 million to Portugal euros. He justified the need forextraordinary measures, approved by the Council of Ministers and will be discussed in Parliament next week, to avoid bankruptcy the country and the pressures to leave the eurozone.

The output of the euro “would be unacceptable and will not let that happen,” said Passos Coelho, who accused the previous Socialist government had spent up to June 2011 70% of the budget for this year. The Conservative leaderwarned of the severe recession facing the country, whose GDP is expected to fall by 1.9% this year and 2.2 next.

He insisted that it is essential that the agreement meets Portugal in order to have the 78,000 million international loan, essential to the functioning of the country. Portugal is committed to the EU and the IMF to gradually reduce its deficit, at 9.8% in 2010 and recently revised up hidden debts in the region ofMadeira, to less than 3% in four years.

He also announced an increase of several VAT rates, intermediate (13%) tohigh (23%), although the commodity will be at the reduced rate. He noted thattax deductions will be reduced between higher wages.