Portugal chooses election over forming coalition
LISBON — Portugal’s political parties yesterday opted to hold an early election rather than form a new government, even though that could hasten the debt-stressed nation’s financial woes and force it to take a bailout.
Portugal is rudderless and at the mercy of nervous financial markets after the Socialist government quit earlier this week in a dispute with rivals over new austerity measures.
President Anibal Cavaco Silva, who is largely a figurehead but oversees election procedures, met yesterday with all the country’s political parties to see if they would voluntarily form a coalition government. But all backed a new election instead, which would take place in late May or early June.
Portugal, one of Western Europe’s poorest countries, is being engulfed by a financial crisis that is pushing it toward a bailout it doesn’t want.
A decade of anemic growth during which Portugal ran up high debts has spooked the markets, sending its borrowing costs to unsustainably high levels. Although Europe’s bailout fund is able to come up with the $105.6 billion that analysts estimate Portugal may need, its problems have contributed to investor fears about the entire 17-nation European Union’s financial soundness.
Neither of Portugal’s two dominant parties want to ask for outside financial help like Greece and Ireland, the two other European Union countries that were forced to accept bailouts last year, due to fears that they would be locked into tight fiscal policies and lower living standards for years.