The apology of Sócrates

Following the Greek debt crisis, Spain was quick to react by cutting government spending. Portugal's PM Sócrates however decided to limit wage cuts to senior politicians, increase value-added tax and postpone infrastructure projects. Portugal is now facing debt problems because of these decisions. PM Sócrates has agreed to meet the target 2011 deficit cuts by further increasing value-added tax, freezing pensions and cutting public sector wages. These proposals have stirred irritation among the labor unions who are planning to take to the streets in protest in November. The opposition party is pushing for fewer tax increases and more cuts on government spending. Even though the plans are to tighten fiscal policy PM Sócrates is confident that Portugal will maintain economic growth.