Portuguese ruling coalition parties, opposition fail to reach deal on bailout

Portugal’s ruling coalition parties and opposition have failed to reach a national salvation deal to comply with the conditions of an international bailout package.

On Friday, weeklong talks between Portugal’s three main parties over austerity cuts broke down, leaving in doubt the country’s bailout program to back austerity policies demanded by the European Union (EU) and the International Monetary Fund (IMF).

The leader of Portugal’s Socialist opposition party Antonio Jose Seguro said the center-right ruling coalition had rejected most of his party’s proposals and “made it impossible” to strike a deal.

“There were two different visions to exit the crisis. That being clear, it made no sense to continue negotiating for the sake of negotiating,” Seguro said.

According to Seguro, the government’s plans to implement EUR 4.7 billion of spending cuts were the main obstacle.

He said it was now up to the Portuguese president to decide how to end the crisis.

The rift in the coalition began nearly three weeks ago with the resignation of the country’s finance and foreign ministers.

Portuguese President Anibal Cavaco Silva has said he may have to dissolve the parliament if the parties do not reach a deal.

On July 11, the president called for early elections next year, rejecting a plan to mend a reported split within the government on austerity measures required for the eurozone country to exit its bailout imposed by EU and the IMF.

The decision reportedly served as a warning to all major political parties, showing that the conservative president does not regard any of them capable of ruling successfully until the EU-IMF bailout expires next June.

Portugal is grappling with a three-year-long recession and record unemployment of more than 18 percent as it implements the tough cuts promised in return for its 78-billion-euro bailout package from the EU and IMF.