Portugal under Supervision

LISBON/BRUSSELS/BERLIN (Own report) – The EU is exerting massive pressure to prevent the new Portuguese government from reversing austerity measures. Last Friday, the EU Commission conditionally accepted – with stipulations – Prime Minister António Costa’s Draft Budget Plan aimed at phasing out the austerity policy. Brussels has already scheduled a budget reassessment for the spring. During her meeting with Costa, the day of the Commission’s decision, Angela Merkel urged Portugal’s prime minister to continue to pursue his predecessor Pedro Passos Coelho’s austerity policy. Powerful financial market actors, notably the Commerzbank, are also opposing the democratically elected Prime Minister. The socialist minority government – supported by smaller leftwing parties – is facing a crucial test.

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Portugal and Greece are now vying to be this week’s crisis in Europe

Update (3:26 PM ET): Portugal’s governing coalition today saw its second major loss in two days, as Paulo Portas, the foreign minister and leader of the Democratic and Social Center-People’s Party (CDS-PP), tendered his resignation.

Meanwhile, EU authorities have given Greece three days to deliver on promises it’s made to the troika—the group composed of the International Monetary Fund (IMF), the European Central Bank, and representatives of European countries, which is monitoring the euro debt crisis.

Clearly, Greece and Portugal are fighting to be the most scary country in the euro this week. Continue reading