"We do not believe in a model of low wages," says Paulo Portas - Público.pt

Paulo Portas said on Thursday that the government “does not believe in low-wage model,” in reaction to the report of the International Monetary Fund (IMF), issued Wednesday and argues that it is necessary to continue to reduce salaries.

At the press conference that followed the Council of Ministers, the Deputy Prime Minister said that “it is important for the Portuguese realize that in some matters the Government’s positions are different from the IMF,” adding that “when the Portuguese read certain statements of an entity’s external mission can understand how the Government is right to say that you must complete the” adjustment.

“There are differences of opinion between Portugal and the IMF on the issue of labor costs in Portugal,” said Paulo Portas, stressing that the government believes that “the private sector has already made its adjustment” and that, therefore, the executive “has upset some proposals” of the institution led by Christine Lagarde. At the insistence of journalists, the Deputy Prime Minister said: “This report commits only the person subscribes.”

report released Wednesday, the IMF believes that, although the executive Passos Coelho has in place a set of “structural reforms”, the “reform agenda” may not “ambitious enough” to reverse what it says be the lack of competitiveness of the Portuguese economy.

“Because it takes time to increase productivity, improve external competitiveness also requires reducing production costs, including salaries. Yet despite major reforms conducted under the program [troika], persisting structural rigidities “, identifies the institution, which, since the previous evaluation report, defended the application of measures to promote wage declines.

also confronted with the contents of locations of this institution, the Parliamentary Affairs Minister said that the Government has had attitude “of firm opposition” to the proposals of the IMF, with regard to salary reductions. Already on the risks to which the institution alert, including the possibility of being declared the unconstitutionality of some measures of executive, Luis Marques Guedes again warn that may be even tougher.

“The Government has been forced to find alternative measures that could not be carried out for reasons that are strange,” he said, in a subliminal reference to the veto of the Constitutional Court. Marques Guedes took the opportunity to stress that “all possible alternatives will be more painful for the Portuguese and the country.”