The Portuguese government has announced plans to reduce its fiscal deficit. The aim is to cut the deficit from an expected 6.2 % of GDP this year to below 3% – the theoretical maximum ceiling permitted under the EU’s growth and stability pact – by 2008. Most of the savings will come by addressing the cost of public sector workers – of whom there are some 700,000 in Portugal (total population a little over 10 million). Promotions are to be frozen, salaries pegged to a 2% rise, and retirement ages raised from 60 to 65. All this is provoking a storm of threatened protests, so I guess the proof of the pudding will be in the eating.