World Bulletin/News Desk
In an about-face, Portugal's government has agreed to negotiate alternative solutions to a social security tax hike that sparked the worst backlash to austerity since last year's EU/IMF bailout, an official statement said on Saturday.
After an eight-hour meeting of the presidential state council that was besieged by protesters and ended long after midnight on Saturday, the council said the negotiations would now proceed between the government, unions and employers.
On Friday, Prime Minister Pedro Passos Coelho promised to "listen to the country" after huge street protests last weekend and criticism of the plan by unions and business leaders alike. He had previously only agreed to "calibrate" the measure.
The plan to raise the contributions in 2013 to 18 percent form 11 percent has undermined a reluctant acceptance of austerity in Portugal, increasing pressure on the government as it strives to meet the strict conditions of the bailout.
"The council was informed of the government's readiness to study, within the framework of the social bargaining process, alternatives to changes in the social security rate," the statement said after the council meeting.
* It also said that "difficulties that could affect the solidity of the ruling coalition have been overcome", confirming earlier statements by the two centre-right coalition partners that they remained committed to the bailout's targets. Junior coalition partner CDS-PP is traditionally against tax hikes.
Thousands of protesters gathered next to the presidential palace where President Anibal Cavaco Silva's met with his council -- the consultative body made up of senior political figures, including Prime Minister Pedro Passos Coelho.
They demanded the government's resignation and chanted: "Thieves, thieves!". Over a hundred stayed until the end of the meeting and booed the council members as they left.
Expresso weekly newspaper said in its weekend edition the premier had decided to abandon the measure, which had irritated workers because it simultaneously reduced social security contributions by companies, but was preparing a new cut in holiday subsidies for workers instead to meet tough fiscal goals of the bailout.
Some analysts say the badly-devised attempt to hike the social security levy will make additional austerity measures harder to swallow now despite the government's retreat and strife is likely to grow especially since Portugal's economic recession is now expected to continue next year.
Portugal has entered its worst recession since the 1970s as it labours under sweeping tax increases and spending cuts, with the centre-right government's popularity slumping to an all-time low after it announced the tax changes.
Volatility eased as traders focused on the world economy and corporate earnings after a week dominated by the dramatic spike in tensions over North Korea, which triggered a global sell-off before prices bounced back Monday.
Investors greeted the more conciliatory tone after US stocks dropped three days in a row last week on President Donald Trump's vow of "fire and fury" if North Korea continued to pursue its nuclear weapons and ballistic missile programs.
The ultra-conservative kingdom has moved to diversify its traditionally oil-dependent economy following a sharp fall in crude prices.
In its monthly report on the global oil market, the International Energy Agency said, however, that it believes the supply glut is easing, partly because demand is growing faster.
US stocks have been in retreat since President Donald Trump Tuesday issued a fiery warning to North Korea to halt its nuclear program.
The move by one of Japan's best-known firms greatly reduces the chance of an embarrassing delisting from the Tokyo Stock Exchange (TSE).
London's benchmark FTSE 100 index weakened by 0.5 percent to 7,503.39 points.
The approval by the European Commission comes just over two months after the European Central Bank -- which took on the role of the eurozone's banking supervisor in 2014 -- allowed the sale to go ahead for a symbolic fee of one euro.
BP, Chevron, ExxonMobil, Shell and Total have all published results in recent days, showing they pocketed $23 billion in net profit in the first half fo the year.
Higher cereal, sugar and dairy prices pushed food price index by 10.2 percent annually in July
HSBC was also a big riser, gaining three percent at £7.65 ($10, 8.5 euros) in late morning trade after the British banking giant announced a share buyback plan alongside a rise in first-half profits.
Both main crude contracts made strong gains, with WTI testing $50 a barrel for the first time since late May and Brent heading towards $53, while mining giants BHP Billiton and Rio Tinto saw their share price rise as commodities strengthened.