ANOTHER ONE BITES THE DUST

Here is a summary of the conditions for the 78,000 million euros rescue for Portugal imposed by the IMF, the European Commission and the ECB:



A. EXPENDITURE
1.-Reduction of 1,000 million euros per year for government.
a) Elimination of superfluous services (15% total reduction in operating costs)
b) Limitation on new hires.
c) Reduction of staff (with a 15% decrease of managers)
d) Freezing of wages.
d) Reduction of medical benefits to public workers.
2.-Reduction of 370 Million per year in education.
a) Reduction of staff.
b) Reduction of subsidies to private schools.
3.-Reduction of 925 million in the public health system.
a) Reduction of aid to pharmacy expenses.
b) Increasing of the co-payment system.
4.-Progressive reduction of pensions (445 million savings)
5.-Cut of unemployment insurance in time and money (150 million) and lowering of dismissal cost for the companies.
6.-Reduced cost of public companies (515 million) and accelerating the privatization of electric companies REN, EDP, TAP Air, National Energy Networks, Airports of Portugal, GALP, National Post and insurance division of Caixa Geral de Depósitos.
7.-Reduction transfers to local and regional governments (175 million)

B. INCOME
1.-Reduction of tax exemptions to individuals (150 million) and companies (150 million)
2.-Elimination of deductions for housing (250 million euros)
3.-Increase in VAT through reduce of exemptions base (410 million)
4.-Change taxes for goods and services.
5.-Rise in consumption tax on vehicles, tobacco and electricity.

Spain's economy is 6.4 times that of Portugal (1.035.656 million euros of gross domestic product against 161.472 million) and 4.3 times greater population (46.1 million versus 10.6). Whatever the level of government debt in Spain, we can get an idea of the magnitude and impact of a hypothetical bailout rescue.

Think about this:
In Greece, whose economy and population slightly higher than Portugal, the bailout has not worked. The measures for Portugal were agreed before debt payment default in Greece last week.

Conclusion: If Spain goes down, the measures (which we will not decide but will be imposed from outside) will be much harder.