LISBON—Bringing Portugal's public finances in order is an "immediate priority of the Portuguese government," the country's Finance Minister Fernando Teixeira dos Santos said Monday.
Reducing the budget deficit and public debt is "fundamental to regain the confidence of investors and ensure that conditions for the financing of the Portuguese economy [exist]," Mr. Teixeira dos Santos said at a press conference presenting the Organization of Economic Coordination and Development's most recent economic survey on Portugal.
Fernando Teixeira dos Santos, Portugal's finance minister.
The cost of financing Portugal's debt has been rising as international financial markets are worried about the minority government's ability to get its 2011 budget approved and to meet its deficit-reduction targets. Portugal's biggest opposition party, the Social Democratic Party, last week said it won't approve the budget if the government insists on further tax increases.
Portuguese Prime Minister Jose Socrates said on Friday that if the budget weren't to be approved, the government wouldn't be able to function. Portuguese media interpreted his statement as hint the government could resign if the budget weren't passed.
Mr. Teixeira dos Santos Monday said that the government will continue its program of structural reforms, including reforms of the labor market, education system, and reforms intended to increase the competitiveness of the Portuguese economy and reduce red tape. He also said the government will soon propose legislation that sets budget spending limits within a framework of multiyear planning.
OECD Secretary General Angel Gurría said that Portugal needs a fast consolidation of its public finances in order to win back investors' trust. "The best way to regain their confidence is a rapid reduction of the deficit," Mr. Gurría said. Mr. Gurría supported the government's focus on structural reform, but also stressed the need for strong political consensus to achieve "ambitious budget cutting."
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