Portugal

A recent court decision blocking cuts in wages and pensions for public employees in Portugal is forcing the government of one of Europe's most fragile economies to move beyond palliative measures and try to overhaul the underlying structure of an inefficient public sector, The Wall Street Journal reported.

Portugal unveiled an ambitious stimulus program on Tuesday to resuscitate its economy despite new concerns about some public companies that could hit the government's budget plans, The Wall Street Journal reported. Economy Minister Álvaro Santos Pereira said the government will aim to cut the corporate tax rate, provide incentives for foreign companies to move to Portugal, tackle a highly bureaucratic system that hurts investments and offer financing for small- and medium-size enterprises at attractive terms. Mr.

Portugal could struggle to avoid a second international rescue even if it, alongside Ireland, is granted more time to repay its existing bailout loans by eurozone finance ministers meeting in Dublin on Friday, the Financial Times reported. Portugal, which is tussling to meet its deficit reduction targets during a deep recession, would have to raise a lot more in the two years after its planned exit from the bailout programme in 2014 than it did in pre-crisis times, according to a document seen by the Financial Times.

Portugal faces a delay in receiving bailout funds and the possible postponement of a long-awaited decision on easing repayments after the constitutional court rejected important government austerity measures, the Financial Times reported. The court ruling means Lisbon will not receive the next €2bn instalment of its €78bn bailout until it has convinced international lenders that fresh cuts in spending on health, education and social security will be sufficient to compensate for the rejected measures.

The eurozone is facing a new crisis and another government could fall after Portugal's highest court rejected four out of nine austerity measures ordered by international lenders, including the European Union, as a condition for the country's 78 billion ($96bn) bailout, The Australian reported. The court's decision to throw out government cuts to state pensions and public-sector wages came less than two weeks after Cyprus, a eurozone member, came close to leaving the currency.

Euro zone governments are discussing ways to help Ireland and Portugal return to the capital markets swiftly and some among them have voiced a preference for delaying the repayment of bailout loans by the two states, sources familiar with discussions said yesterday, the Irish Times reported. The sources quoted from a 15-page discussion paper from the European Commission and the European Stability Mechanism that was debated last week by deputy finance ministers from the euro zone.

Portuguese Finance Minister Vitor Gaspar painted a worse-than-expected picture of the country's economy this year, forecasting a 2% contraction and saying the government may need more time to meet the budget-deficit target of its €78 billion ($104 billion) international bailout agreement, The Wall Street Journal reported. Mr.

The number of firms going bust in recession-hit Portugal jumped 41 percent last year, but the toll should fall in 2013 after rising for seven years, credit insurance company Cosec said on Wednesday, Reuters reported. Cosec, Portugal's largest insurer, said in its annual report 6,688 companies were unable to pay their debts and declared insolvency in 2012, nearly a third of them in the construction and real estate sector. Three-fourths of the insolvent companies were small businesses.

Thousands of teachers from around Portugal are marching in downtown Lisbon to protest proposed spending cuts they say will slash (EURO)1 billion ($1.3 billion) from the education budget, the Associated Press reported. Unions say the government plans to privatize many public schools and cut around 50,000 sector jobs.

Portugal sold its debt on financial markets Wednesday for the first time since it needed a bailout, collecting (EURO)2.5 billion ($3.3 billion) in an auction of five-year bonds that was a milestone for economic recovery efforts in Portugal and the wider eurozone, the Associated Press reported. Treasury secretary Maria Luis Albuquerque said Portugal will pay interest of 4.9 percent on the loan - an affordable rate and a sign of returning market confidence in Portugal. She said investors placed orders for more than (EURO)12 billion and 93 percent of the sold amount went to foreign buyers.