Por­tu­gal’s new coali­tion gov­ern­ment takes of­fice

Kathimerini English - - NEWS -

LIS­BON (AP) – Por­tu­gal’s new coali­tion gov­ern­ment took of­fice yes­ter­day, charged with steer­ing the debt-heavy coun­try out of an acute fi­nan­cial cri­sis that forced it to take a 78-bil­lion-euro ($112 bil­lion) bailout and con­trib­uted to Europe’s debt woes. Pe­dro Pas­sos Coelho was sworn in as prime min­is­ter in an ad­min­is­tra­tion made up of his cen­ter-right So­cial Demo­cratic Party and the smaller, con­ser­va­tive Pop­u­lar Party. An elec­tion ear­lier this month ousted the cen­ter-left So­cial­ist Party, which gov­erned dur­ing the past six years of eco­nomic de­cline. Por­tu­gal is stuck in a re­ces­sion that is pre­dicted to last through next year, and un­em­ploy­ment stands at a record 12.4 per­cent af­ter a decade of mea­ger growth when the coun­try ran up huge debts. The new gov­ern­ment must move quickly to en­act a raft of aus­ter­ity mea­sures and eco­nomic re­forms, promised in re­turn for the fi­nan­cial res­cue pack­age from its Euro­pean part­ners and the In­ter­na­tional Mon­e­tary Fund that spared it from bank­ruptcy. “The chal­lenges we face are enor­mous,” Pas­sos Coelho said in a speech. “We are liv­ing through hard times and more dif­fi­cul­ties await us.” He said his pri­or­i­ties were restor­ing the coun­try’s fis­cal health, en­sur­ing fresh growth and more jobs, and help­ing the needy who are suf­fer­ing from aus­ter­ity mea­sures. Any sign Por­tu­gal is fail­ing to honor its com­mit­ments would fur­ther com­pli­cate the con­ti­nent’s ef­forts to stanch its sov­er­eign debt cri­sis amid mount­ing fears about Greece’s prospects of avoid­ing de­fault. The pre­vi­ous gov­ern­ment in­tro­duced tax hikes and pay and wel­fare cuts to re­duce debt, but ad­di­tional aus­ter­ity mea­sures are needed to meet debt tar­gets es­tab­lished as part of the bailout pro­gram.

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