Portugal: the new socialist led government looks to consumption to relaunch the economy

António Costa’s socialist government has announced a series of measures that should relaunch the economic activity in 2016. Measures abolishing certain austerity led taxes and levies imposed during the last four years as well as raising incomes and social assistance are geared to relaunching the country’s internal demand and raising growth. More complicated projects including lowering the TSU (workers’ single social contributions) and raising the minimum wage will have to wait on the sidelines. The Prime Minister nevertheless is looking to fast forward discussions on the legal minimum wage and has called for a meeting between the social consultation bodies on 10 December. The coalition Communist party and extreme left are calling for a minimum wage of €600 gross from 2016.
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Relaunching the economy. Portugal’s Socialist government is relying on an alliance with the Communist party and the extreme left for a majority in the National Assembly. Examination of the government’s program and its draft financial aw for 2016 has commenced and despite being behind schedule the government is maintaining its goal of keeping the deficit below 3% of GDP by the end of 2016. Prime Minister António Costa is counting on internal consumption demand to raise tax revenues with the...

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