THE GUARDIAN: • EU bailout closer after José Sócrates loses crucial vote • Political limbo will put pressure on Portuguese bondsPortuguese prime minister José Sócrates has said he has submitted his resignation to the president after parliament rejected his minority Socialist government's latest austerity measures.
The loss of the vote "has taken away from the government all conditions to govern," Sócrates said. It brings the country closer to needing a bailout.
Sócrates is said he tendered his resignation to President Aníbal Cavaco Silva tonight, leaving the country in a political limbo that would place further pressure on Portugal's record-level bond yields.
Sócrates had said before the vote that he would resign if the measures to cut spending and increase taxes – designed to see off a bailout similar to those taken by Greece and Ireland – were rejected.
The measures had aroused the fury of trade unions, and railway engineers walked off the job in the morning, causing widespread travel disruption. » | Giles Tremlett in Madrid | Wednesday, March 23, 2011
THE GUARDIAN: Portugal bailout 'could cost UK £3bn': Bailout request seen as 'inevitable' following prime minister's resignation in wake of failure to push through austerity measures » | Graeme Wearden | Thursday, March 24, 2011
