Portuguese prime minister announces reshuffle in bid to save government

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Portuguese prime minister announces reshuffle in bid to save government

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Portugal’s prime minister has announced a cabinet reshuffle, hoping to end a week-long crisis which threatened to bring down the government and undermined confidence in it sticking to the terms of the bailout.

Prime Minister Pedro Passos Coelho made the head of the junior coalition party CDS, Paulo Portas, his deputy. Portas will be responsible for coordinating economic policies and the government’s relationship with its bailout lenders.

Portas had triggered the rift earlier in the week when he resigned as foreign minister in protest at the appointment of a new finance minister who he believed would push through the austerity measures. He has been a strong critic of austerity policies under the 78 billion-euro bailout.

Passos Coelho said he believed the deal within the coalition would work well:

“The agreement combines the political conditions necessary to guarantee stability until the end of the mandate and assure the fulfilment of our external commitment. It also strengthens the value of economic policies and the priority of growth and employment, and has consequences on the makeup of the government.”

In Lisbon, demonstrators have been calling for elections to be held.

The agreement still has to be approved by President Anibal Cavaco Silva, who will meet all political parties to discuss the crisis on Monday and Tuesday.

On Monday, EU finance misters meet to discuss the situation in Portugal.