Portugal speeding up govt handover amid bailout

BARRY HATTON - Associated Press
Pedro Passos Coelho, líder del centroderechista Partido Social Demócrata de Portugal, da un discurso en un hotel de Lisboa después de que su partido ganó los comicios generales del domingo, 5 de junio del 2011. (Foto AP/Armando Franca)

LISBON, Portugal (AP) — Authorities in Portugal are trying to expedite the handover of power to the newly elected center-right government so it can start tackling the country's ruinous debt crisis.

President Anibal Cavaco Silva, mostly a ceremonial figure, says he wants to swear in Social Democrat leader Pedro Passos Coelho as prime minister in time for a June 23 European Union summit. The center-right Social Democrats unseated the Socialist government in an election Sunday.

Cavaco Silva told reporters late Monday he had spoken to the National Electoral Commission about accelerating mechanisms for the publication of official results, which can take more than a week. After that, seats in the 230-seat Parliament have to be allocated and filled before the governing party formally presents its policy proposals for its four-year term.

Portugal's notoriously slow bureaucracy is viewed as one of the obstacles to its economic development.

The new government must swiftly enact an austerity and reform program demanded in return for its euro78 billion ($114 billion) international bailout.

If Passos Coelho is not in power by the Brussels summit, Portugal will be represented by a lame-duck prime minister — Socialist leader Jose Socrates, who lost Sunday's ballot after six years in power but remains in a caretaker role.

The Social Democrats are also engaged in negotiations with the smaller, conservative Popular Party about forming a coalition government. Such a deal would give the two right-of-center parties an overall majority in Parliament, making it easier for them to pass legislation.

The emphatic election victory by a liberal, business-friendly party committed to fighting debt and spurring growth initially pleased investors, and the yield on Portugal's 10-year bonds fell slightly Monday.

However, markets remain worried about Greece, where the government is finding it hard to meet the conditions of its own bailout provided by Europe and the International Monetary Fund. That has fanned fears about the wider 17-nation eurozone's financial health, including Portugal where the yield shot back up to a record 9.895 percent Tuesday.

The outgoing finance minister, Fernando Teixeira dos Santos, said Tuesday he is compiling a list of urgent measures for his successor to help ensure a smooth handover.

"The deadlines are demanding, they'll need to do a lot of work," he told reporters. "We just have to look at Greece to see that Portugal cannot fail and I think the (new) government faces an enormous challenge."

Passos Coelho wrote on his Facebook page late Monday, "We will not hesitate, but we will show the patience of those who know the benefits won't materialize in a couple of days."