Most Portuguese reject bailout conditions

(LISBON) - The latest draconian measures to shore up the Portuguese economy will make matters worse and the government should break the agreement with the IMF and European Union or obtain better terms, an opinion poll found on Monday.

But most Portuguese people also hold that when a bailout programme with the so-called troika of the IMF, EU and European Central Bank ends in June 2014, the economic crises in Portugal will worsen and unemployment will rise.

The government has signalled that it has successfully concluded the terms of new action to raise taxes and cut spending, including the shedding of 30,000 civil servants jobs.

The new package is required by the International Monetary Fund and EU in return for the expected release of the next slice of bailout funding. The government had to come up with re-drafted measures after some of the measures, already agreed with creditors, were struck down by the constitutional court.

But the Portuguese people have shown increasing hostility to a string of austerity packages to correct public finances and restructure the economy, and the latest poll found that 82.5 percent of people questioned in the poll held that Portugal should break the latest agreement or renegotiate it.

The latest poll, carried out by Eurosondagem, also found that 47.8 percent of those questioned held that the agreement on the latest measures should never have been signed.

And 55.1 percent of the people surveyed said that they thought Portugal will plunge into an ever deeper economic crisis when the bailout programme expires.

In 2011, Portugal was unable to refinance its public deficit and debt on the bond market because the interest rates demanded by lenders had risen to unsustainable heights.

Portugal, a member of the eurozone, obtained a rescue loan of 78 billion euros ($100 billion) from the IMF and EU, to be disbursed in slices on condition that it enacted radical measures to correct public finances and raise efficiency in the economy.

But Prime Minister Pedro Passos Coelho's belt-tightening measures -- which include shedding 30,000 civil servant jobs and a delay in the age to qualify for a full pension from 65 to 66 years -- have run into strong objections from the public and also within his centre-right coalition government where some ministers have criticised some spending cuts.

Last year, the economy contracted by 3.2 percent and is forecast to shrink another 2.3 percent in 2013.

Portugal's unemployment rate also rose sharply in the first quarter, hitting a record high 17.7 percent from 16.9 percent in the fourth quarter of last year.

The implementation of austerity measures has become an increasingly hot topic in the 17-member eurozone, with hard-hit countries to the south clamouring for an end to austerity policies championed by Germany and like-minded countries in the north.

A total of 1,205 people were polled in the survey which was conducted through telephone interviews between May 13-15. The margin of error was 3.06 percent.