Government finance
Who's wage was cut in 2010 by 20%?
Portugal
The Portuguese government is heavily indebted, and received a 78 billion euro bailout from the European Union and the International Monetary Fund in May 2011. The ratio of Portugal’s debt to its overall economy, was 107 percent when it received the bailout. As part of the deal, the country agreed to cut its budget deficit from 9.8 percent of GDP in 2010 to 5.9 percent in 2011, 4.5 percent in 2012 and 3 percent in 2013. After the bailout was announced, the Portuguese government headed by Pedro Passos Coelho managed to implement measures with the intention of improve the State's financial situation, including tax hikes, a freeze of civil service-related lower-wages and cuts of higher-wages by 14.3%, on top of the government's spending cuts. The Portuguese government also agreed to eliminate its golden share in Portugal Telecom which gave it veto power over vital decisions. In 2012, all public servants had already seen an average wage cut of 20% relative to their 2010 baseline, with cuts reaching 25% for those earning more than 1,500 euro per month. The IMF, the European Commission and the European Central Bank said in September 2012 that Portugal’s debt would peak at 124 percent of gross domestic product in 2014. The IMF previously said in July 2012 that Portugal’s debt would peak at about 118.5 percent of GDP in 2013. In September 2013, the Portuguese Government reviewed again the public debt of Portugal for 2013 to 127.8 percent, after a peak of 130.9 percent in that month. A report released in January 2011 by the Diário de Notícias and published in Portugal by Gradiva, had demonstrated that in the period between the Carnation Revolution in 1974 and 2010, the democratic Portuguese Republic governments encouraged over-expenditure and investment bubbles through unclear Public–private partnerships and funding of numerous ineffective and unnecessary external consultancy and advisory of committees and firms. This allowed considerable slippage in state-managed public works and inflated top management and head officer bonuses and wages. Persistent and lasting recruitment policies boosted the number of redundant public servants. Risky credit, public debt creation, and European structural and cohesion funds were mismanaged across almost four decades. After the financial crisis of 2007–2008, it was known in 2008–2009 that two Portuguese banks (Banco Português de Negócios (BPN) and Banco Privado Português (BPP)) had been accumulating losses for years due to bad investiments, embezzlement and accounting fraud. The case of BPN was particularly serious because of its size, market share, and the political implications - Portugal's then current President, Cavaco Silva, and some of his political allies, maintained personal and business relationships with the bank and its CEO, who was eventually charged and arrested for fraud and other crimes. In the grounds of avoiding a potentially serious financial crisis in the Portuguese economy, the Portuguese government decided to give them a bailout, eventually at a future loss to taxpayers and to the Portuguese people in general.