PORTUGAL:FAILURE TO adopt a broad coalition government to deal with the financial crisis could result in Portugal being forced to abandon the euro currency, its foreign minister said over the weekend.
The opposition and government must come together to deal with an “extreme situation”, Luis Amado told the weekly Expresso.
Portugal saw a sharp loss of investor confidence in the past few weeks as concerns over Ireland intensified over its budget, pushing Portugal’s risk premiums to their highest levels since it adopted the euro.
“I believe that the parties understand that the alternative to the situation we confront is eventually leaving the euro,” Amado said.
Much of the concern over Portugal’s efforts to cut its budget deficit in the past few weeks came from doubts over whether the opposition Social Democrats would support the austere 2011 budget in parliament.
The Socialists and Social Democrats finally reached an agreement leading to approval of the 2011 budget at its first reading in parliament this month. – (Reuters)