[QODLink]
Europe

Portugal government to stay in power

Portugal's president accepts compromise reached by the coalition government that ends a weeks-old political crisis.

Last Modified: 21 Jul 2013 22:35
Email Article
Print Article
Share article
Send Feedback
Portugal's President Anibal Cavaco Silva expects the move could complete Portugal's bailout programme [Reuters]

Portugal's president has accepted a compromise reached by the coalition government that allows it to stay in power, to end a weeks-old political crisis and keep an international bailout on target.

Ruling out early polls, President Anibal Cavaco Silva on Sunday said that he is opting for “the best alternative” which is “the continuation in office of the current government.”

“The coalition, which has overcome an internal rift that triggered the crisis in early July, has presented guarantees of a solid understanding on how to successfully complete the bailout programme and allow Portugal to return to full market financing,” Silva said.

The coalition almost split on July 2 when Foreign Minister Paulo Portas, the leader of the junior party, threatened to resign raising fears that Portugal would be unable to abide by the terms of its $102 billion international bailout.

The crisis had threatened to derail Lisbon's planned exit from the EU/IMF bailout, especially after talks on a broader political deal between the two coalition parties and the opposition Socialists collapsed on Friday.

But a compromise was reached within the coalition when Portas was appointed deputy to Prime Minister Pedro Passos Coelho—a move that required the president's agreement, which he gave late Sunday.

Positive move

Some observers have called the decision a positive one that would remove uncertainty among investors.

"I think it's a positive decision to calm down investors that removes uncertainty and maintains the drive of meeting the bailout goals," says  Rui Barbara, an economist at Banco Carregosa.

"In the eyes of investors, Portugal should return to the situation before the political crisis,” Barbara adds.

The government has a solid majority in parliament and last week easily defeated a no-confidence motion.

The main ruling Social Democrats (PSD) has said the government will press on with meeting fiscal goals for Lisbon to exit the rescue programme by mid-2014 as planned.

The austerity measures pursued under the bailout has stoked the worst recession in Portugal since the 1970s.

329

Source:
Agencies
Email Article
Print Article
Share article
Send Feedback
Topics in this article
People
Country
City
Organisation
Featured on Al Jazeera
An innovative rehabilitation programme offers Danish fighters in Syria an escape route and help without prosecution.
Street tension between radical Muslims and Holland's hard right rises, as Islamic State anxiety grows.
Take an immersive look at the challenges facing the war-torn country as US troops begin their withdrawal.
Ministers and MPs caught on camera sleeping through important speeches have sparked criticism that they are not working.
Featured
Spirits are high in Scotland's 'Whisky Capital of the World' with one distillery thirsty for independence.
President Poroshenko arrives in Washington on Thursday with money and military aid on his mind, analysts say.
Early players in private medicine often focused on volume over quality, turning many Chinese off for-profit care.
Al Jazeera asked people across Scotland what they think about the prospect of splitting from the United Kingdom.
Blogger critical of a lack of government transparency faces defamation lawsuit from Prime Minister Lee Hsien Loong.
join our mailing list