International

Portugal's Government Expected To Collapse, After Vote On Austerity Measures

Portugal's Prime Minister Jose Socrates (L) sits with Finance Minister Fernando Teixeira dos Santos during a plenary session at the parliament in Lisbon. i

Portugal's Prime Minister Jose Socrates (L) sits with Finance Minister Fernando Teixeira dos Santos during a plenary session at the parliament in Lisbon. Francisco Leong/AFP/Getty Images hide caption

itoggle caption Francisco Leong/AFP/Getty Images
Portugal's Prime Minister Jose Socrates (L) sits with Finance Minister Fernando Teixeira dos Santos during a plenary session at the parliament in Lisbon.

Portugal's Prime Minister Jose Socrates (L) sits with Finance Minister Fernando Teixeira dos Santos during a plenary session at the parliament in Lisbon.

Francisco Leong/AFP/Getty Images

Today, Portugal's Parliament is expected to vote on a set of austerity measures aimed at avoiding an Ireland or Greece-like bailout. CNN International reports that Portugal's Socialist Prime Minister Jose Socrates said he would resign if the measures fails.

By all accounts, the vote, scheduled for 2 p.m. ET, is not expected to go his way and the government is expected to dissolve. CNN reports:

The question for many is how Portugal's delicate financial situation, with 10 percent unemployment and tepid economic growth, would fare in the meantime, with a lame-duck government.

Socrates will go to Brussels on Thursday for a European Union summit, where Portugal's finances and the strength of the euro currency are expected to be discussed.

Bloomberg reports that Socrates' goal is to avoid a bailout, but if he resigns the lame-duck government might be forced to accept help from the European Union. Bloomberg points out that on March 15, Moody's Investors Services downgraded Portugal's credit rating. It stands "four steps from so-called junk status, with the outlook on the grade 'negative.'"

Bloomberg quotes the prime minister:

"If parliament decides on a motion against the stability and growth program, that means the government is not in a condition to make commitments internationally," Socrates said on March 15. "That would mean a political crisis. In my understanding, the consequence of a political crisis is the worsening of the financing risks of our economy and would lead Portugal to request external intervention."

Dow Jones reports that the news in Portugal has caused the Euro to fall against the dollar and the yen.

Update at 5:40 p.m. ET: As expected, Portugal's Parliament voted against the government's austerity measures and Prime Minister Jose Socrates has tendered his resignation.

Ireland's RTE reports:

"Today every opposition party rejected the measures proposed by the government to prevent that Portugal resort to external aid," Mr Socrates said in a televised address.

"The opposition removed from the government the conditions to govern. As a result I have presented my resignation to the president," he said.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.