Another Europe News
OECD frets over Portugal’s pension problems – economy
http://www.euronews.com/ There has been a mixed report on Portugal’s economic reforms from the Organisation for Economic Cooperation and Development.
It called them “ambitious and courageous” but said Lisbon must recalibrate the country’s pension entitlement and scrap early retirement if it is to really make progress.
Euronews’ Paris correspondent Giovanni Magi reported there was some good news in a study that the Lisbon government had asked the OECD to draw up: “The OECD is encouraging Portugal to keep going with reforms, and is even optimistic. That is optimism that is really needed by Portugal’s people, as the crisis hits them hard.”
On May 3, Portugal’s Prime Minister Pedro Passos Coelho announced a series of new austerity measures, in order to meet the demands of international creditors who are loaning Lisbon money so the country does not go bankrupt.
After the OECD report was presented Passos Coelho said: “The latest programme we announced and that we’re discussing with our social partners is not an austerity programme. It has consequences only for government workers.”
The OECD warned Portugal’s rapidly ageing population is jeopardising its efforts to return the economy to financial health.
The problem with the pension reforms is that they threaten to tear apart the country’s coalition government and will likely be challenged in the courts.
The successive austerity measures adopted so far have plunged the Portuguese economy into recession and pushed unemployment to record levels at 17.7 percent.
The Bank of Portugal has forecast that GDP will shrink by 2.3 percent this year because of a sharp drop in domestic demand and a slowdown in exports.
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