LISBON (Reuters) - Portugal’s prime minister and the leader of the Socialists were meeting the president on Friday after a week of talks between the ruling coalition partners and the main opposition party to reach a broad political deal to ensure an EU/IMF bailout stays on track.
SIC television showed Socialist leader Antonio Jose Seguro entering the president’s palace followed by Prime Minister Pedro Passos Coelho about an hour later. They did not comment and it was not clear if they had reached any agreement.
A rift in the coalition triggered the crisis at the start of this month and threatened to derail Portugal’s plans to exit the 78-billion-euro bailout program in mid-2014 as planned.
President Anibal Cavaco Silva last week asked Passos Coelho’s Social Democrats, their junior coalition partner CDS-PP party and the Socialists to reach a “national salvation” deal to end the political uncertainty.
The main point of divergence is likely to be on plans to cut spending by 4.7 billion euros until the end of next year, which the Socialists have criticized. Any concessions on the cuts would need to be approved by Lisbon’s lenders.
The president wants cross-party backing for the bailout until its end and then an early election.
The parties have given themselves until Sunday to come up with a plan, but Cavaco Silva has said that the parties can take an extra one or two days if needed.
The yield on Portugal’s benchmark 10-year bonds fell 25 basis points to 6.85 percent on Friday on optimism that the parties would strike a deal.
Reporting by Shrikesh Laxmidas and Daniel Alvarenga; Editing by Sonya Hepinstall