- Pedro Passos Coelho, Prime Minister of Portugal
The Portuguese government is going to present its budget for the next year, which is expected to include sharp tax increases and more cuts in public sector spending. Portugal should reduce country's fiscal deficit below 3% of GDP in order to meet targets under its 78-billion euro EU/IMF bailout. Government had already decided to increase social security contributions in 2013 by 7% to 18%, up from existing 11%.
"It's a difficult budget, the most difficult under the bailout. Deficit targets have been eased, but ... Portuguese should prepare for this difficult budget with a very significant increase in the tax burden," said Pedro Passos Coelho, Prime Minister of Portugal.
"The axe could fall very much on tax increases but when you've got 15% unemployment rate you're not going to be able to fill that budget gap with income tax rises alone," said Kathleen Brooks, research director from currency traders Forex.com.
The Stoxx Europe 600 Index rose 0.51 per cent to 270.80. Germany's DAX Index edged higher 0.40 per cent to 7,261.25 and France's CAC 40 Index jumped 0.92 per cent to 3,420.28.
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