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Portugal welcomes new government

Monday, June 06, 2011 - 01:59

June 6 - Portugal welcomed a new government on Monday, with many in the capital Lisbon saying the country has chosen the right party, despite the hardships facing the nation as it tries to dig itself out of massive debt. Andrew Potter reports.

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A new week and a new political landscape for Portugal. But the country's new government faces the same problem as its predecessor, digging the country's economy out of crippling debt. The Social Democratic Party or PSD took victory on Sunday with 39 percent of the vote. It will likely form a coalition government with the smaller Popular party. PSD leader Pedro Passos Coelho (PASS-OSH KO-WELL-YO) will become Portugal's prime minister. (SOUNDBITE) (Portuguese) PORTUGUESE PRIME MINISTER-ELECT, PEDRO PASSOS COELHO, SAYING: "Now we know that we were somewhat of a burden to our European partners from a financial point of view, and we don't want to be a burden a day or a second longer than is necessary." The election winners are faced with daunting economic reforms and trying to impliment the harsh austerity measures which brought the last government to its knees. Portugal took a 78 billion euro bailout last month from the European Union and International Monetary Fund. The terms of that loan include higher taxes, spending cuts and privitisation. Traders in Lisbon say the election result will bring stability. SOUNDBITE: HEAD OF TRADING AT GOBULLING, JOAO QUEIROZ, SAYING (English): "If the new government, with this strong coalition in the parliament, starts implementing the measures that came out of this bailout agreement, in the long run it will be positive and we will have strong results for our economy." Portugal is facing its highest unemployment for 30 years, and the economy is expected to contract by two percent this year and next. The PSD is committed to the austerity measures, but they're unlikely to be popular, meaning it could face the backlash which crippled the previous government. Coelho says he wants to restore international confidence in Portugal. That was in evidence at home on Monday, with Portuguese stocks opening higher. Andrew Potter, Reuters

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Portugal welcomes new government

Monday, June 06, 2011 - 01:59