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Portugal Adopts Austerity Plan

Portugal's parliament has approved a plan to hike taxes and cut salaries and welfare benefits next year in a bid to restore market confidence in its public finances.

The country's high debt and low growth have alarmed investors and made it possibly the next European country to need a bailout after Greece and Ireland.

In Paris, European Commission President Jose Manuel Barroso dismissed such speculations.

"I can tell you that any reference to a plan for [Portugal] is absolutely false, completely false," Barroso said.

"It has been neither sought nor suggested. It's completely untrue."

The Portuguese government insists it won't need financial rescue, saying the austerity measures scheduled for approval today will restore fiscal health.

In order to tackle its high budget deficit and meet conditions of any loan package, the Irish government unveiled a tough recovery plan on November 24.

compiled from agency reports