Portuguese lawmakers gave preliminary approval Friday to the government's 2012 austerity budget aimed at putting the country's finances in order despite widespread discontent at some of the measures. The approval, on a first reading, comes just as the Italian parliament votes on economic reforms demanded by the European Union in its fight against debt contagion, and as Greece makes progress on a new government to enact deep budget changes.
Prime Minister Prime Minister Pedro Passos Coelho's centre-right government, elected in June, has a comfortable majority in parliament with 132 of the 230 seats. The Socialists, who lost power in the polls, abstained in the vote while the extreme left, which counts 24 seats, voted against. The budget is scheduled for a final vote on November 30.
Portugal was bailed out in May to the tune of 78 billion euros ($107 billion) by the European Union and International Monetary Fund and the government has pledged to raise taxes and cut spending, an unpopular mix which has hit growth hard. The 2012 budget, described by Passos Coelho earlier in the week as "very tough," will scrap annual bonus payments worth two months salary for civil servants and for pensioners with income above 1,000 euros per month.
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