Portuguese govt defeated on austerity measures

[Joanne98]

LISBON, Portugal -- Portuguese opposition parties defeated a government austerity plan on Friday and passed their own bill that lets the country's autonomous regions rack up even more debt. The move raised new questions about European countries' ability to control their swollen budget deficits.

The vote was also likely to rattle the world's financial markets, which are already concerned that the financial troubles gripping Greece may spread to other vulnerable eurozone countries such as Portugal and Spain.

Portugal's minority Socialist government had fiercely opposed the opposition bill, since it contradicted earlier promises to crack down on ballooning debt. Yet the bill passed 127 to 87, appearing to show that Portugal, western Europe's poorest country, has little appetite for painful austerity measures.

Later Friday, some 30,000 civil servants marched through downtown Lisbon to protest a public sector pay freeze - another unpopular debt-reducing measure. Unions say they will also organize strikes.

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http://www.forbes.com/feeds/ap/2010/02/05/general-eu-portugal-financial-crisis_7333967.html

[Joanne98]

1. World stocks down again after Portugal budget vote

European and U.S. stock markets traded lower again Friday despite a surprise improvement in the U.S. unemployment rate, as investors fretted about the debt crisis enveloping Europe after Portugal's lawmakers defeated the government over its deficit reduction plan.

In Europe, the FTSE 100 index of leading British shares was down 91.77 points, or 1.8 percent, at 5,047.54, while Germany's DAX fell 74.48 points, or 1.4 percent, to 5,458.76. The CAC-40 in France was 73.70 points, or 2 percent, lower at 3,615.55.

On Wall Street, the Dow Jones industrial average was down 56.75 points, or 0.6 percent, at 9,945.43 soon after the open while the broader Standard & Poor's 500 index fell 5.85 points, or 0.6 percent, to 1,057.26.

Some stability emerged in the markets -- at least the selling tide was stemmed -- by the news that the U.S. unemployment rate dropped unexpectedly in January to 9.7 percent from 10 percent even as employers shed 20,000 jobs helped shore up investor confidence about the pace of the U.S. recovery.

The drop in the U.S. unemployment rate came as a welcome relief to markets battered over the last couple of days by mounting worries about the debt crisis afflicting Europe.

http://www.businessweek.com/ap/financialnews/D9DM3KL80.htm

[westerebus]

2. Portugal's tea-baggers are socialists?

Who would have thunk it?

Wait for Hungry to default.

It's not just the southern tier, the defunct Warsaw Pact is under water too.

This is going to get ugly.