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Eurogroup chief urges crisis-hit Portugal to 'take responsibility'

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(Globalpost/GlobalPost)

Eurogroup chief Jeroen Dijsselbloem on Wednesday called on Portugal to take responsibility amid a political crisis that threatened to bring down the government.

"The situation is worrying. So I'm calling on Portugal to take responsibility," Dijsselbloem, who is also finance minister of the Netherlands, told the Dutch parliament.

"I imagine that the situation will stabilise and that the Portuguese government will remain committed to pursuing the programme" of reforms it is implementing in return for crucially needed bailout funds.

The government is scrambling to survive after the shock resignation of two key ministers on Monday and Tuesday over the austerity reforms required by the European Union, European Central Bank and the International Monetary Fund.

A day after Finance Minister Vitor Gaspar stepped down, Foreign Minister Paulo Portas resigned, citing disagreement with the government's policy of maintaining a path of austerity despite deep resentment among the population.

With the crisis pushing the country's borrowing rates up and causing stocks to plunge, the Eurogroup chief called for the government to swiftly stabilise the situation.

"Political stability is crucial for all countries that have a programme (of adjustment) if they want to progress with reforms and straighten out budgets -- in fact, it is important for all countries but especially those that have such a programme," Dijsselbloem said.

Prime Minister Pedro Passaos Coelho's coalition government, which came to power in early elections in June 2011, is charged with implementing a rescue plan of 78 billion euros ($101 billion) from international creditors.

But it has come under intense pressure, with a mass work stoppage organised last week by the trade unions -- the country's fourth general strike in two years.

The European Commission has called on Portugal to "clarify the situation as soon as possible".

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http://www.globalpost.com/dispatch/news/afp/130703/eurogroup-chief-urges-crisis-hit-portugal-take-responsibility-0