Finance minister in bailed-out Portugal resigns

Portuguese Finance Minister Vitor Gaspar, the main architect of the country’s reforms under its EU-IMF bailout, submitted his resignation on Monday, the government said.

Treasury Secretary Maria Luis Albuquerque was expected to be appointed to replace Gaspar, a government source told AFP.

Portugal is struggling to apply radical budget and economic reforms to unlock bailout loans under a 78-billion-euro ($102-billion) package the European Union and the International Monetary Fund granted it in May 2011.

The economy, already in recession for two years, is expected to contract by another 2.3 percent this year.

Meanwhile, unemployment is expected to rise to a record 18.2 percent.

A former central bank advisor, Gaspar was the principal architect of Portugal’s efforts to balance its finances which has included tax hikes, plus cuts in spending and state jobs.

Political opponents have criticised Gaspar for blindly implementing the recommendations of the EU, IMF and European Central Bank despite indications the austerity measures were causing Portugal’s economy to contract further.