News / Economy

Portugal, Greece Face Challenges Over Austerity Pledges

European Commission Director Matthias Morse, center, arrives at finance ministry, Athens, July 2, 2013.
European Commission Director Matthias Morse, center, arrives at finance ministry, Athens, July 2, 2013.
VOA News
Two debt-ridden European countries — Portugal and Greece — are facing new challenges on the austerity programs they agreed to in order to secure international bailouts and avoid bankruptcy.
 
In Lisbon, the government was near collapse after two key officials resigned in protest of its cost-cutting measures. Foreign Minister Paulo Portas quit Tuesday, the day after Finance Minister Vitor Gaspar left.
 
Portas is the leader of the Popular Party, the junior party in the center-right coalition government headed by Prime Minister Pedro Passos Coelho. But Portas did not say whether he would take his party out of the government.
 
Meanwhile, Greece's international creditors are putting new pressure on Athens to meet its pledges to cut government spending before handing over more bailout money.
 
The lenders are unhappy with the pace of cutbacks in the Greek government workforce and growing deficits on health-care spending. Athens missed a June deadline to put more than 12,000 state workers into a program under which they would be transferred to other jobs or dismissed within a year.
 
Greece, now in its sixth year of recession and with more than a quarter of its work force unemployed, is seeking release of more than $10 billion from its latest rescue package.
 
But cutting spending to meet the demands of the lenders has proven difficult, with widespread protests last month over the government's shutdown of the state-run broadcaster ERT and firing of 2,600 workers.
 
The lenders — Greece's European neighbors, the European Central Bank and the International Monetary Fund — have been meeting with government officials in Athens. They are demanding that the government make progress on its austerity pledges ahead of next week's meeting of eurozone finance ministers, who are set to discuss whether to release more money to Athens.
 
Some information for this report was provided by AFP and Reuters.

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