Portugal

International Monetary Fund Managing Director Christine Lagarde said debt restructuring is not on the table for Portugal and the country’s authorities are determined to continue their aid program to regain access to bond markets, Expresso reported, citing an interview. Portugal’s aid program is on the “right path” and a significant part of the adjustment has been carried out, Lagarde was cited as saying by the newspaper. The IMF is worried about the increase in unemployment, she said in the interview, carried out in mid-December.

Portugal's president sent the 2013 budget to the country's highest court for review, an unusual move that highlights deepening opposition to a two-year austerity drive, the Wall Street Journal reported today. President Aníbal Cavaco Silva, who is the head of state and like Prime Minister Pedro Passos Coelho belongs to the right-of-center Social Democratic Party, signed the budget bill into law on Monday, but expressed reservations the next day.

The Portuguese government is seeking to cut its corporate tax rate for new businesses to one of the lowest in Europe as part of a plan to attract investment and revitalize ailing industries, the minister of economy said, The Wall Street Journal reported. The government is in talks with the European Commission's competition agency in Brussels to get approval to cut the tax on corporate income for new investors to 10% from the current 25%, the minister, Alvaro Santos Pereira, said in an interview.

Portugal won't seek a Greek-style debt restructuring deal, but will stay alert to opportunities to discuss better terms for the country where the principle of equal treatment applies, the country's top officials have said Tuesday, Dow Jones reported. "We don't want to be treated like Greece and have a solution identical to Greece's because we don't have a situation identical to the Greek's," Portugal Prime Minister Pedro Passos Coelho was quoted as saying by state-agency Lusa in a trip to Cape Verde.

Portugal's Parliament on Tuesday approved unprecedented tax increases despite a broad public outcry and concerns that the latest austerity package will prolong the bailed-out country's recession, the Associated Press reported. The center-right coalition government used its overall parliamentary majority to pass its 2013 budget. All opposition parties voted against the deficit-reduction measures which will cost most workers the equivalent of at least a month's income next year.

Debt-laden Portugal has passed the sixth quarterly review of its performance under an EU/IMF bailout, opening the way for payment of the next 2.5 billion euro (2 billion pounds) tranche of the loan despite growing economic risks, the lenders said on Monday. The review, which lasted just a week, found the country was progressing in reforming its economy and the programme remained broadly on track to allow it to again finance itself in debt markets as planned next year. Previous reviews lasted two weeks.

Portugal's government won parliamentary approval Wednesday for an unpopular package of tax increases and spending cuts, keeping its international bailout program on track and avoiding the kind of political crisis that has accompanied Greece's rescue effort, The Wall Street Journal reported. In a further sign of strength for Western Europe's poorest economy, one of its banks managed for the first time in two years to raise cash on the international bond market without government guarantee and without submitting to a direct claim on its assets.

Portugal's parliament is expected to approve the biggest tax hikes in its modern democratic history on Wednesday, paving the way for a court fight over a budget the government says it urgently needs to keep a 78-billion euro bailout afloat, Reuters reported. Political tension has been increasing and anti-austerity demonstrations have become more common in recent weeks in Portugal, which despite being one of the countries worst hit by the euro zone crisis had so far escaped unrest seen elsewhere.

Portugal needs to make tough policy choices to close a “large and durable fiscal gap” amid rising social hardship and growing political and social resistance to more austerity, the International Monetary Fund warned on Thursday, the Financial Times reported. The government would have to strike a balance between “strong additional” adjustment measures and “avoiding undue strains on the economy and employment”, the fund said in a report on Lisbon’s progress with its €78bn bailout programme.

Lisbon has unveiled an uncompromisingly tough budget for 2013 involving the biggest direct tax increases in living memory as the government struggles to keep Portugal’s €78 billion bailout programme on track, the Irish Times reported. Finance minister Vítor Gaspar said yesterday that income tax increases would include a special 4 per cent levy on earnings. The average tax rate would increase from 9.8 per cent of earnings to 13.2 per cent.