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    AUSTERITY MEASURES

    Pedro Passos Coelho, in unveiling a host of belt-tightening measures in the mould of those enforced by the bailout Troika, his government had resisted the temptation to do away with austerity measures despite the fact that the budget coincides with an election year.
    Shortly after details of the budget were unveiled, the Prime Minister explained: “This is clearly a budget based on realism and it is a budget that was not drawn up thinking about elections.
    “I know there are politicians who think that elections are won by lowering taxes and increasing wages. I must tell you that I have serious doubts that the people, the electorate, reason along these exact same lines.”
    Despite opting for the continuation of austerity in 2015 and even allowing for more taxes, next year’s budget does appear to call for the least amount of sacrifices from the Portuguese taxpayers than in any of the previous four budgets presented in the wake of the financial crisis.
    While the Troika had called for the budget deficit to be reduced to 2.1 percent in 2015, down from its current expected figure of 4.0 percent, the Government has only opted to pledge a deficit of 2.7 for next year. This smaller reduction has inevitably allowed for fewer austerity measures being imposed on the Portuguese for 2015.
    Among austerity measures included in the budget are an increase of two cents a litre on diesel and on unleaded fuel (95 and 98 octane). With these increases, the Government is hoping to generate an additional 160 million euros from this fuel tax. The revenue, it said, would be used to pay off debts incurred through Public-Private Partnerships.
    Benefit payments will once again see a reduction in maximum payments, though certain welfare contributions, such as dole payments, will be unaffected, while support payments made to families with children will be reduced in the coming year. Overall, cuts in benefit payments will result in a saving for state coffers in the region of 100 million euros.
    Taxes on banks will also be hiked with expected income anticipated to reach just over 31 million euros.
    Tobacco and alcohol are both also set to see their respective prices rise on 1 January 2015 to additional taxes.
    Overall, the percentage the Government expects to generate for increased taxes and greater social contributions to reach 37 percent of the Gross Domestic Product, meaning that the tax burden on taxpayers has now reached its figure on record.
    The budget meanwhile also foresees growth of 1.5 percent in the economy in 2015, repeating the positive trend established towards the end of 2013 and for the duration of the current year.
    Unemployment is also forecast to fall to pre-crisis levels, and is set to drop to 13.7 percent, the Government said.
    Speaking upon presenting the budget, Finance Minister Maria Luís Albuquerque said it was drawn up bearing in mind how it would be looked at by international creditors and the European Commission.
    “We want to show them that this is a budget of great responsibility and one which maintains the efforts of recent years.”
    However all these measures will continue to impose on the Tax payer further burdens as less money is available for public spending, Portugal already has one of the most expensive energy prices in the world, a liter of unleaded fuel (95 octane ) is a staggering 1.599€, even now as crude prices are at a four year low consumer prices increase last week for the motorist.
    If the Government and the petrol companies Galp, BP, Repsol and Cepsa continue with this negative policy then Portugal will not meet the pledge  deficit of 2.7 for next year.
    All excuses are used to the population that the consumer price for petrol cannot be lowered in Portugal, this is one of the reasons Portugal needed the Troika bailout.
    The formula is simple…
    Lower fuel and energy prices, the bigger the public spending, more investment and more jobs can be created.

    written by ABSTRACTMIND @ 12:09 pm, ,

    OPEC members


    The reason for the drop in crude prices and the offering of discounts by some OPEC members is a consequence of years of inflated price fixing by everyone directly involved in crude production.

    The world economy is in a slump and will continue to fall as Chinas production rate falls, Europe will also show more week spots, the US shows a production increase of one digit, far below estimates.

    The only way out for OPEC to maintain its production crude prices level, will be $85 per barrel, fixed price, for at least three years.

    This measure will stabilize demand, increase consumption and allow economies to strengthen.

    A rigorous control by crude producers and governments in maintaining prices at $85 per barrel will as shown, be the best advantage to a recovery of the world economy.

    written by ABSTRACTMIND @ 3:07 pm, ,

    OPEC CRUDE DISCOUNTS



    Iran will sell its oil to Asia in November at the biggest discount in almost six years, matching cuts by Saudi Arabia as global crude benchmarks slide deeper into a bear market.

    State-run National Iranian Oil Co. cut official selling prices of its crude to buyers in Asia for November, two people with knowledge of the pricing decision said yesterday. The decrease came a week after Saudi Arabia, the world’s largest oil exporter, reduced the price of Arab Light crude for Asia to the lowest since December 2008. Brent crude, the international benchmark, fell to the lowest in almost four years today.

    The timing of Iran’s price cuts makes the price war more and more probable, Iran is fully aware of the direction of and the mood in the market. Given that we’ve seen consecutive cuts, this would seem to be some kind of action and reaction.”

    Middle Eastern oil producers are facing greater competition in Asia, their largest market. Cargoes from the U.S., Russia and Latin America are finding buyers there amid a surplus on international markets. The pace of demand growth is lower in the region as the economy slows in China, the world’s second-largest oil consumer. Futures for Brent and West Texas Intermediate, the U.S. benchmark, have both fallen more than 20 percent from their June peaks, meeting the common definition of a bear market. Front-month Brent traded as low as $88.11 a barrel today on the ICE Futures Europe exchange in London, the lowest since December 1, 2010. WTI dropped as low as $83.33 a barrel on the New York mercantile Exchange, the lowest since July 3, 2012.

    written by ABSTRACTMIND @ 12:15 pm, ,


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