Portugal to slash 30,000 public sector jobs and raise retirement age "To hesitate now would harm the credibility that we have already won back," Mr Coelho declared, adding that the measures were aimed at avoiding a second bailout. With the cuts, Portugal's public deficit is anticipated to narrow to 5.5pc of gross domestic product this year, to 4pc in 2014 and finally to 2.5pc in 2015, under the EU's ceiling of 3pc. The plans will need to get the green light from its troika of international lenders - the European Union, the European Central Bank and the International Monetary Fund - which granted Portugal a €78bn bailout loan two years ago. The Portuguese economy is expected to shrink by 2.3pc this year with unemployment poised to breach a record 18pc. Last month, the government was forced to revise its 2013 austerity plans when the country's Constitutional Court rejected several projected cuts it now has had to find elsewhere. "We will not raise taxes to correct the budgetary problem resulting from the Constitutional Court's decision," Mr Coelho said. The way must be through the structural reduction of public spending. But Mr Coelho is struggling for support. Austerity policies to meet bailout conditions have grown deeply unpopular and sparked several protests. Portugal's main Socialist opposition party, which was in power when Lisbon sought the bailout in 2011, has accused the government of applying "excessive austerity" that has made recession and unemployment even worse.