Government coalition partner will vote in favor of austerity budget

The conservative Democratic and Social Center – People’s Party (CDS-PP), the junior coalition partner in the Social Democrat-led government of Prime Minister Pedro Passos Coelho, on Thursday said it would vote in favor of the state budget proposed by Finance Minister Vítor Gaspar.

The CDS-PP had previously not made any official announcement on the budget, giving rise to speculation on its stance.

“Portugal cannot have a political crisis that would further worsen the extremely sensitive economic and social situation that the country is going through,” CDS party leader and the country’s foreign minister, Paulo Portas, said in a statement posted on the group’s website on Thursday.

Portas said his party is aware that the absence of an approved budget would constitute in itself the failure to comply with the commitments taken on by Portugal in exchange for a bailout of 78 billion euros from the IMF and the European Union. “Portugal needs this foreign assistance,” Portas said.

On presenting the budget on October 15, Gaspar said a rejection of the text by parliament would be tantamount to repudiating the bailout form the IMF and the EU. The budget includes “enormous” tax hikes to reduce the public deficit to 4.5 percent of GDP next year.

The CDS must put its responsibility toward the country above everything else”

Portas said Thursday his group would propose amendments to the budget to improve it. The CDS-PP has suggested that more could be done to reduce spending to ease the tax load. Only 20 percent of the total fiscal adjustment included in Gaspar’s budget will come from cutbacks.

A number of CDS-PP lawmakers have expressed doubts about the heavy reliance on tax hikes in the budget. “I believe this budget is unacceptable for the CDS-PP, which has a social contract with those who voted for the party, because it entails a brutal increase in taxes,” José Manuel Rodríguez, one of the party’s vice presidents, said earlier this week.

“The CDS must put its responsibility toward the country above everything else,” Portas said in his statement on Thursday.

The CDS-PP has 24 members in the 230-seat parliament and the Social Democrats 108. The opposition Socialist Party (PS) has stated that it will reject the proposed budget.