Portugal’s new premier commits to debt reduction
LISBON (AFP) – Portugal’s incoming prime minister moved fast yesterday to reassure the markets of his commitment to tame the national debt, standing by a campaign pledge to go beyond the demands of a 78billion-euro rescue package from the European Union and the International Monetary Fund. Pedro Passos Coelho, leader of the center-right Social Democrats (PSD) which defeated the Socialists in a general election on Sunday, also said his government would lower labor costs for exports as a way to revive the economy. “We must be more ambitious in terms of privatizations, in public media for example,” he said in an interview with French business daily Les Echos. The PSD backs the privatization of one of state broadcaster RTP’s two television stations as well as the state water company and the Lisbon metro. Partially privatizing savings bank Caixa Geral de Depositos is also part of Passos Coelho’s vision as outlined in a book published in 2010 called “Change,” as a way to reduce the role of the state in the Portuguese economy. Portugal became the third eurozone country after Greece and Ireland to seek a bailout after outgoing Prime Minister Jose Socrates resigned in March when parliament rejected his minority Socialist government’s latest austerity measures, sending Lisbon’s already high borrowing costs sharply higher. Last month, Greece was forced to agree to privatize more national assets in order to reach the budget targets set out in the bailout program it reached last year with the EU and the IMF. During the campaign, Passos Coelho warned that Portugal risked following the example of Socialist-run Greece, which now needs even more money a year after it got its bailout, if Socrates remained in power.