Portugal’s new coalition government takes office
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.