Portuguese President Anibal Cavaco Silva on Monday asked Pedro Passos Coelho to start talks on forming a new government, despite not having yet been officially named prime minister.
Coelho has pledged to stick the terms of an international bailout and is expected to seek support from the conservative People’s Party.
The Social Democrat leader said Portugal should not be a financial burden on its European partners and vowed to go beyond the conditions attached to the 78-billion-euro rescue package.
He will formally replace outgoing Socialist Jose Socrates on June 15 when the final results are published to include overseas.
The Socrates government collapsed in March after parliament defeated its deficit-cutting proposals.
Under the terms of the EU-IMF deal, Portugal must slash public spending and make key structural reforms to make its economy more competitive.
The country’s budget deficit stood at 9.1 per cent of output last year. That number must be reduced to three per cent of GDP by the end of 2013.