Portugal parliament approves 2019 budget bill in first reading
LISBON (Reuters) - Portugal’s parliament approved the Socialist government’s 2019 budget bill on Tuesday, setting the scene to nearly eliminate the deficit amid projected healthy economic growth and with more income for families.
Portugal, which only emerged from a debt crisis in 2014, has managed to combine fiscal discipline with policies to support strong growth under the center-left administration, while reversing many unpopular austerity measures during a bailout.
Its example, often lauded by Brussels, is in sharp contrast to Italy’s plans to widen the budget deficit in 2019. The plans, opposed by the European Commission, have unnerved investors, causing Italy’s bond yields to rise well past Portuguese ones.
Finance Minister Mario Centeno said it was precisely Portugal’s fiscal performance in line with EU budget requirements that had helped slash its financing costs, allowing to use the saved money for what he called “an enormous relief of the tax burden”, while also narrowing the budget gap.
Government allies in parliament - the Communist Party and Left Bloc, who along with the Socialists hold 122 seats in the 230-seat house, voted for the bill.
The center-right opposition Social Democrats and conservative CDS-PP voted against, criticizing the bill as an election year gimmick while pointing to a slowing growth they say will ultimately undermine the budget consolidation.
Reporting By Andrei Khalip, editing by Axel Bugge and Angus MacSwan
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