Portugal is on the brink of approving an austerity plan aimed at reducing its overweight budget deficit.

The minority Socialist government should be able to pass the programme with the opposition PSD having decided to abstain from a vote on it in parliament.

While the PSD doesn’t agree on some of the details of the plan, it supports the overall goal.

Francisco Assis, leader of the socialist grouping in parliament said:

“We do have disagreements, which is normal. We don’t have the same position on the economic and budgetary policies for the next few years. But there are some profound issues on which are points of view do converge.”

Investors have been spooked by Portugal’s deficit and by yesterday’s decision by the credit agency Fitch to downgrade Portugal’s rating, making it more expensive to borrow.

The government plan forecasts a deficit acceptable to the European Union by 2013.

Copyright © 2012 euronews