WSJ: Portugal approves EU pact

13 April 2012

The pact, which was approved by 204 votes to 24 with two abstentions, will require Portugal to keep its budget deficit to an average of 0.5 per cent of GDP over the economic cycle, and to reduce its total government debt towards 60 per cent of GDP over time.

The Portuguese parliament will continue discussions on whether it will include the budget deficit rule in the country's constitution or whether it will settle for a law that could be overturned by a two-thirds majority. The main opposition, the Socialists, are in favour of the second, while the government wants the rule in the constitution.

With the approval, Portuguese Prime Minister, Pedro Passos Coelho, hopes to demonstrate to his EU peers that the country, which is under a €78 billion bailout, is disciplined and committed to controlling its accounts. "If it weren't possible to see this instrument ratified, Europe would sink without rules for its future", he told Parliament on Thursday.

The head of the Socialists, António José Seguro, said although the party agrees that Portugal must follow the European path, it "doesn't respond to problems essential to Portugal, especially unemployment".

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© Wall Street Journal