European debt crisis

LISBON, Portugal, May 13 (UPI) -- Portugal is to soon join the European countries instituting austerity measures in the fight against the eurozone debt crisis.

Several countries are facing severe deficits as debt obligations come due. The worst-affected are the so-called PIIGS -- Portugal, Ireland, Italy, Greece and Spain. Problems in the countries have caused confidence the euro to fall, weakening the economic position of many European countries.

Richer countries, many of which saw the problems developing and took steps years ago to forestall them, are being looked to to help their economy-challenged brethren. Before they write checks in rescue, however, they are demanding the debt-ridden countries take strong steps to guarantee they are serious about addressing the problem

Greece, which has the most dire economic situation, addressed its huge budget deficits with a series of moves that include changes in public sector pay and pension plans. Those have been met with large general strikes in protest.

Spain announced austerity measures, cutting public sector pay, Wednesday. Ireland has also raised taxes and cut spending.

Thursday, Portugese Prime Minister Jose Socrates said he would propose a "crisis tax" to fill in his country's deficit hole. He plans to increase the value added tax to 21 percent (up 1 percent), add 1.5 percent to the income tax and 2.5 percent to the corporate tax while government officials and public sector managers will see 5 percent pay cuts.

The steps, quickly protested by the country's trade unions, are worth about $2.6 billion and look to ease a debt that was measured at 9.4 percent of gross domestic product last year.