EU leaders push Portugal on austerity plan

No discussion at summit on prospect of bail-out for Portugal.

EU leaders have told politicians in Portugal to implement austerity measures agreed by the country’s prime minister before his resignation.

A day after José Sócrates stepped down after losing a crucial parliamentary vote on proposals to cut Portugal’s deficit, he attended a two-day summit of EU leaders in Brussels.

However, at a press conference at the end of Thursday’s summit, José Manuel Barroso, the president of the European Commission, insisted that leaders had not discussed the prospect of an international bail-out for Portugal.

Barroso said: “The prime minister of Portugal presented the situation and he explained the vote in the Portuguese parliament. In the most likely case, whatever will be the next government, all commitments in terms of fiscal targets will be respected.”

Sócrates won praise for his austerity plans from fellow eurozone leaders when they last met in Brussels, on 11 March.

Barroso, a former Portuguese prime minister, said: “The prime minister gave assurances to colleagues that whatever the next government, this [the austerity targets] will be achieved. We expressed confidence [that Portugal would] overcome the current situation and find the funding needed.

“The European Commission reaffirmed that it is essential that fiscal targets made by Portugal are fully met.

“We have to respect democracy in Portugal. If there are elections we believe Portuguese democracy will resolve this political crisis as quickly as possible.”

All five Portuguese opposition parties voted in favour of a resolution rejecting the package put forward by the minority socialist government on Wednesday night. Sócrates tendered his resignation shortly afterwards. However, an election in Portugal will not be held until April or May.

Market analysts have believed for some time that rising borrowing costs and political instability may make a bail-out inevitable.

Mark Rutte, the Dutch prime minister, told reporters after the meeting that EU leaders agreed that all Portuguese political leaders had to commit themselves to carry out the austerity package put together by Sócrates.

“Despite the political crisis, all should be done to implement the package,” said Rutte.