Wednesday, June 8, 2011

Passos Coelho, a prime minister with his hands tied

Portugal's President Anibal Cavaco Silva, has asked the Social Democrat Pedro Passos Coelho forming government with the utmost urgency. The prime minister-elect will have to meet during the next few hours with the Democrat Paulo Portas, with whom he formed a coalition of right to begin to shape the next Executive, whose program may not be very different from the memorandum of understanding signed with the IMF and European Commission during the ransom negotiations.

The main challenge facing the next government Luso is the implementation of foreign aid program. Has already begun to arrive the first part of the 78,000 million euros to the country avoid bankruptcy. The primary commitment assumed with the European Commission and the IMF is to reduce the current deficit of 8.6% to 3% in 2013.

International institutions required to Lisbon to present the first results in late July. To do this, Passos Coelho will have to begin now to work on the best way of implementing austerity measures. Among them include the new VAT increase in the intermediate steps and other taxes on fuel, alcohol and snuff.

Cuts in education and public administration, national and regional levels also are planned. Still, in one of his last speeches during the election campaign, Passos Coelho said he would not forget the most disadvantaged who are the most are feeling the pinch. But we must reduce the time and the maximum amount of unemployment benefits, and end with tax exemptions.

With this set of austerity measures to Passos Coelho has still been room to assure citizens that their commitment goes beyond Portugal. The Social Democrat has promised to return to the country growth and reduce unemployment.

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