LISBON, Sept 13 Portugal's budget negotiations
between the minority Socialist government and its left-wing
backers in parliament are heading towards a deal that would
involve providing more income to pensioners, the leader of the
Left Bloc said on Tuesday.
The government, which has promised the European Commission
it would keep cutting the budget deficit even as it reverses
many of the austerity measures of the previous administration,
has to present a draft budget by mid-October.
Some analysts have expressed concern that after pressure
from Brussels for more fiscal consolidation, the new budget
would split Portugal's first-ever alliance of the centre-left
Socialists with the hard left that began in November.
Political instability could also exacerbate investor worries
about Portugal's faltering growth and its credit ratings.
But so far, all signs indicate a smooth budget process. Left
Bloc's Catarina Martins has signalled no outright challenge to
the course of budget consolidation if the government agrees to
increase pensions, especially for low-income pensioners.
"We are getting towards a deal on important matters and that
gives us some confidence about the possibility of a budget that
would correspond to the agreement that we've had" on
parliamentary support for the government, she said.
Martins spoke to reporters after meeting Prime Minister
Antonio Costa. The Communist party, whose support is also
crucial to ensure the parliamentary majority, has yet to
She singled out pensions as the most acute issue because
retirees have so far only lost income in recent years. She also
wants to end a crisis-time income tax surcharge, which has
already been scaled down in this year's budget.
"Considering the low pensions, the poverty among the
elderly, the recovery of pensioners' incomes has to be a
priority," she said, adding that although there were differences
with the government on various matters, the parties were working
to bridge them.
(Reporting By Andrei Khalip and Sergio Goncalves, editing by
Axel Bugge, Larry King)