UPDATE 2-Senior Portuguese minister resigns, adds to unease

Thu Apr 4, 2013 1:09pm EDT

Related Topics

* Allegations of irregularities in obtaining degree

* Portuguese bond yields rose briefly

* Government austerity faces test in court

By Andrei Khalip

LISBON, April 4 (Reuters) - A senior Portuguese cabinet minister close to the prime minister resigned on Thursday in a sign of political unease before a court ruling that could threaten government austerity policies.

Parliamentary Affairs Minister Miguel Relvas cited "lack of spirit" to carry on as the reason for his resignation. He gave no further explanation for a decision he said had been taken jointly with Prime Minister Pedro Passos Coelho weeks ago.

One of the cabinet's most unpopular figures, Relvas had been responsible for coordinating government strategy and oversaw relations with parliament. He has faced allegations he obtained his university degree without completing course credits.

Relvas quit a day after the government defeated a parliamentary no-confidence motion by opposition Socialists over austerity required by an EU/IMF bailout.

Although rejected easily , the motion united all the opposition, adding to concerns budget-tightening measures may be overturned by the Constitutional Court.

That ruling is expected any day now. The court has declined to provide any estimates, but some local media say it could come out on Friday. Most analysts expect the court to reject some measures, but not derail the whole budget adjustment course.

Portuguese benchmark 10-year bond yields rose by about 10 basis points to 6.46 percent after the resignation but then eased to 6.42 percent.

Expresso weekly said on its website an education ministry probe into Relvas's degree accelerated his decision to go.

Relvas has faced popular anger, with protesters, especially students, interrupting his speeches several times with songs and shouts. Hand-made signs saying "Go and study, Relvas!" abounded during anti-austerity rallies in recent months.

Political analysts say Relvas's fall is not necessarily negative for the government due to his unpopularity, and may prefigure a bigger reshuffle after the court ruling.

"He was the main public opinion problem for the government but the overall context is so negative that the executive's popularity won't rise because of his exit," said Antonio Costa Pinto, a political analyst at the University of Lisbon.

Portugal is in its worst recession since the 1970s.

"With this resignation and the constitutional court decision looming, the government may very well be tempted to take the opportunity to make a full-blown reshuffle," Costa Pinto said.

He compared Relvas's demise with similar cases in Germany, where two ministers stepped down in the past few years because they were found to have plagiarised their academic theses.

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