[Portugal] PM Promises 25 percent Monthly Minimum Wage Rise

As he starts his second term in office Prime Minister Antonio Costa has made a promise to raise the monthly minimum wage by 25 per cent to 750 euros ($830) by 2023, Euro News reports.

The prime minister also emphasised the goal of cutting public debt to below 100 per cent of GDP. 

Antonio Costa’s centre-left Socialists won the election on October 6 and expanded their parliamentary representation but remain short of a majority. In the 4 years of the party’s rule, the country saw strong economic growth and budget deficit cuts.

The prime minister has depended on support from the two far-left parties in parliament - the Communists and Left Bloc - over the past four years and the minimum wage plan is expected to be well received by them. Portugal’s minimum wage continues to be among the lowest in western Europe.

“The government now outlines its goal of reaching the minimum salary of 750 euros in 2023,” Mr Costa said at the swearing-in ceremony of his new minority government, he added that the planned increase should surpass a rise of nearly 20 per cent in the previous legislature.

He said, “The national minimum salary will evolve every year after discussions with the collective bargaining partners, depending on the employment dynamics and economic growth, but never ignoring the social importance it has.”

While warning that the global economic environment presented challenges to growth, the prime minister said the government’s commitment to promoting further economic expansion, achieving balanced public accounts and greater social justice “does not depend on economic cycles”.

Parliament has not yet debated the new government’s programme. The programme is expected to be presented next week. It does not require a compulsory vote but if parliament decides to put it to the vote and it is rejected, the government could collapse.

However, analysts reportedly cannot foresee any major obstacles to the Socialist government’s path to rule.

Next year’s budget is likely to prove the government with its first big test because the far left is demanding more public spending, while the prime minister insists upon maintaining strict expenditure controls to achieve a balanced budget next year following an estimated deficit of just 0.1 per cent this year. A decrease from the 0.4 per cent deficit in 2018.

The country’s public debt is expected to stand at just over 119 per cent at the end of this year, down from 121.5 per cent in 2018 and well below the 2014 peak of close to 131 per cent, in the wake of Portugal’s debt crisis and bailout.

Source: Euro News