Portugal to face bailout review
Portugal’s austerity programme has sparked major protests
27 February 2012 Last updated at 16:34
http://www.bbc.co.uk/news/business-17183345
Portugal will find out on Tuesday whether it has passed the latest test of its main international backers.
Portugal has made deep spending cuts and is introducing economic reforms.
The European Union, European Central Bank and International Monetary Fund, known as the troika, will release the results of their third review of Portugal’s progress.
Economists say it is likely to approve the next slice of bailout funds for Portugal, worth 14bn euros.
‘Goodwill’
In particular, the government is making important changes to labour conditions.
Last month, it reached an agreement with unions and employers to cut holidays and the compensation paid when workers are laid-off.
Under the deal, it was also made easier to hire and fire staff.
Measures like that have won praise from the troika and Portugal has, so far, received its bailout funds with much less drama than Greece.
“I would be surprised if they didn’t approve it,” said Brian Barry, an analyst at Investec Capital Markets in London.
“There still exists goodwill for Portugal.”
But the gain has not come without pain for Portugal.
There have been deep cost cuts that are hitting public sector workers particularly hard.
Many will see their income cut by a quarter this year compared to 2010.
That has prompted mass protests and a general strike is planned for late March.
