Portugal avoids crisis over budget

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Portugal avoids crisis over budget

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The Portuguese government and opposition have agreed on next year’s budget – averting a political crisis in one of the euro zone’s financially weakest members.

The deal follows a lengthy standoff between the minority ruling Socialist party and the Social Democrats.

At one point it seemed as if the row would plunge the country into paralysis.

Announcing details of the deal, Portugal’s Finance Minister seemed visibly relieved.

“We’ve agreed that we needed in 2011 to reach the target of 4,6 of GDP. That’s why we have to adopt more measures to neutralise 500 million euros lost in the budget,” said Fernando Teixeira dos Santos

The deal also takes enormous pressure off Prime Minister Jose Socrates as he was facing the prospect of appealing for bail-out funds.

He had also threatened to resign which would have created months of uncertainty as an election could only be held in May at the earliest.

Socrates now needs his party to back the budget or abstain in order to pass it. A first vote in parliament is scheduled for Wednesday.