Madeira Bail-out Plan

The bail-out plan signed by President Jardim commits to reduce public spending by 32,1% in relation to the 2011 budget and to raise an extra 17,7% in tax revenue. In exchange, the Portuguese Government has agreed to loan Madeira 1.5 billion Euro, to be repaid as of 2016.

The Madeira debt is now calculated at 6,5 billion Euro and the Regional Government needs to find circa 3,5 billion Euro to meet its commitments until 2015.

The proposed annual reduction in spending, totaling 522,2 million Euros, is as follows:
Investment:        400,2 million
Civil Service:      79,2 million -
                        (49,6 million cuts in Holiday and Christmas subsidies)                                     
                        (16,8 million Social contributions;) 
                        (8,0 million Allowances;)
                        (3,9 million reduction in Civil Servants by 2% yearly;)                                                          
                        (0,7 million reduction in directors posts)
Other expenses:  19,4 million
Subsidies:             2,7 million
Benefits:             15,2 million
Consumption:       5,6 million

The estimated increase in tax income of 126,8 million is as follows:
VAT                      76,0 million
Income tax             29,1 million
Tobacco                23,5 million
Electricity                0,9 million
Alcohol                   0,6 million
Fuel                        4,0 million
Other                      4,0 million
Social contributions 11,3 million