Portugal gov't pressed to ask for bailout changes

By the Associated Press | July 5, 2012 | 7:36 AM EDT

LISBON, Portugal (AP) — Pressure is mounting on Portugal's government to ask its international rescue creditors for more time to meet certain deficit targets.

Austerity measures linked to a €78 billion ($98 billion) financial rescue in May last year are widely blamed for a predicted third recession in four years, and record unemployment of 15.2 percent.

Lower tax revenue and higher welfare payouts are slowing efforts to reduce spending.

Opposition parties, business leaders and trade unions are pushing the center-right government to request at least another year to meet a 2013 target of reducing the budget deficit to 3 percent of GDP.

Miguel Frasquilho, a senior official in Portugal's governing Social Democratic Party who sits on Parliament's budget committee, told national news agency Lusa on Thursday that a two-year extension would be "appropriate."