[QODLink]
Europe

Portugal crisis deepens as talks broken off

Main opposition Socialist party breaks off talks on 'national salvation pact' to ensure EU bailout remains on track.

Last Modified: 20 Jul 2013 03:27
Email Article
Print Article
Share article
Send Feedback
The $102.5 billion bailout is meant to address Portugal's worst financial crisis since the 1970s [Reuters]

Portugal's main political parties have broken off talks on a "national salvation" pact to ensure an EU/IMF bailout stays on track, leaving it to the president to decide how to proceed.

Political turmoil has already forced Lisbon to request a delay in the eighth review of the bailout by its creditors, which was initially due to start last Monday, until the end of August or early September.

The 78 billion euro ($102.5 billion) bailout programme and attached austerity policies are associated with the worst recession in Portugal since the 1970s.

Antonio Jose Seguro, the leader of the main opposition Socialist party, said on Friday that the ruling coalition had rejected most of his party's proposals aimed to renegotiate the terms of the bailout.

The crisis, which started as an internal political rift in the ruling coalition and expanded to a debate over the bailout plan, has threatened to derail Portugal's planned exit from the bailout and full return to debt markets in mid-2014.

The government says abandoning austerity would undermine Lisbon's credibility with lenders and investors.

"There were two different visions to exit the crisis. That being clear, it made no sense to continue negotiating for the sake of negotiating," Seguro told reporters after meeting President Anibal Cavaco Silva.

Seguro said the issue of whether to go ahead with 4.7 billion euro ($6.2 billion) in proposed government budget cuts had been a major sticking point.

Analysts say the situation is very uncertain but the president could still avoid an escalation of the crisis by keeping the ruling coalition in place rather than using his power to dissolve parliament and call a snap election.

273

Source:
Agencies
Email Article
Print Article
Share article
Send Feedback
Topics in this article
People
Country
City
Organisation
Featured on Al Jazeera
UNHCR says hundreds of people trapped in Yaloke town risk death if they are not evacuated to safety urgently.
'Justice for All' demonstrations swell across the US over the deaths of African Americans in police encounters.
Six former Guantanamo detainees are now free in Uruguay with some hailing the decision to grant them asylum.
Disproportionately high number of Aboriginal people in prison highlights inequality and marginalisation, critics say.
Featured
Long-standing dispute over Christian use of the word 'Allah' raises concerns about a very un-Merry Christmas.
The threat posed by ISIL has prompted thousands of young Kurds to join the PKK.
Baja California - with its own grim history of disappeared people - finds a voice in the fight against violence.
Russian feminist rockers fight system holding 700,000 - the world's largest per capita prison population after the US.
Weeks of growing protests against Muslims continue in Dresden with 15,000 hitting the streets last Monday.