The Fauxsterity Chronicles: Portugal (Part II)

Andrew Stuttaford said it best: “Well, this is nuts.”

Reuters has details on what “nuts” is (emphasis added)…

Portuguese politicians from the right to the left attacked the scale of austerity measures in the government’s 2013 draft budget on Tuesday, suggesting the prime minister could face a battle to force it through parliament in its current form.

The centre-right coalition government presented the document on Monday. It included the largest rise in the tax burden in Portugal‘s democratic history, to ensure tough budget goals are met under a 78-billion-euro bailout at a time of deep recession.

I’m assuming Andrew had an older version of the story, which included this gem (emphasis added):

The budget includes the toughest tax hikes yet under the country’s bailout programme (UK sp), which will amount to up to three months’ wages for middle-income workers.

Once again, the government is claiming the alternative to tax hikes is fiscal ruin. However, unlike in previous Fauxsterity tragedies, one party isn’t buying this nonsense (Reuters again):

A big challenge for Passos Coelho is to ensure the small, rightist CDS party, which guarantees his government’s majority in parliament, remains loyal despite its traditional opposition to higher taxes. Two lawmakers from the party expressed doubts on Tuesday.

. . .
So far, the government has said the budget cannot be changed but the CDS has said it wants more spending cuts and fewer tax hikes.

At last, a voice of reason!

Cross-posted to Virginia Virtucon

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