Portugal, Global Economy | featured news

Some countries are hard-hit, like Portugal, Greece, and Italy in the case of textiles, but most countries actually come out ahead. So is rising Chinese productivity good? To quote Sam Shakusky, who’s to say? Portuguese workers certainly don’t seem to win from an increase in textile productivity. But most European workers actually come out ahead. What’s more, productivity growth will also almost certainly lead to rising wages in China, lifting hundreds of millions of people out of poverty and raising the standard of living considerably in the world’s largest country. That may be the most important factor here.

A rare protest by members of Portugal's armed forces against proposed pay and benefit cuts is held in Portugal's capital Lisbon.

Portugal's prime minister said the economy is expected to shrink 2.3% next year, worse than expected, as global growth slows.

The Portuguese government is planning the country's biggest spending cuts in 50 years, a move it described as "unprecedented".

Portugal will elect a new government on Sunday which will lead the country through a period of deep austerity and recession after it received a 78-billion-euro ($114 billion) bailout from the European Union and IMF.

Euro zone finance ministers are ready to back an EU/IMF bailout of Portugal at a Monday meeting overshadowed by the arrest of International Monetary Fund chief Dominique Strauss-Kahn on sexual assault charges.

Ratings agency Standard & Poor's downgraded two of the euro zone's most troubled member states, citing fears that the pair may have to restructure their debt after 2013.