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New Portuguese president vows to heal financial wounds

Published on 09/03/2016

Portugal's new conservative President Marcelo Rebelo de Sousa appealed Wednesday for dialogue to unite the country after the financial crisis and political turmoil over austerity.

“We must heal the wounds caused by so many years of sacrifice,” the 67-year-old former star TV political pundit said as he was sworn in following his January election win.

Although the post of president has no executive powers, Rebelo de Sousa is seen as a calming force following the divisive legislative polls in October.

Despite coming ahead in the vote, Portugal’s incumbent right-wing coalition had to give way to an unstable Socialist-led minority government supported by the radical left, with a commitment to ending austerity policies.

Portugal was engulfed in the financial crisis that threatened to destabilise the eurozone from 2010, receiving a 78 billion euro ($86 billion) bailout from the EU and IMF in 2011 in return for major spending cuts.

“It is essential to re-establish consensus and to resume dialogue,” Rebelo de Sousa said at the ceremony in parliament attended by more than 500 delegates including European Commission head Jean-Claude Juncker and Spain’s King Felipe VI.

“Without discipline and without financial transparency, the risk of a permanent return to crisis is significantly greater,” he said.

“Sound finances without growth, employment and social justice can worsen inequality and social conflict.”

However, the European Commission on Tuesday said Portugal, along with France and Italy, were in violation of EU rules on public spending and would be more closely monitored by Brussels.

Parliament last month approved a 2016 budget that pledged to reverse unpopular austerity measures, although it cut its budget deficit target to 2.2 percent of gross domestic product after an initial EU warning.

Credit ratings agency Fitch has warned investors that additional austerity measures “could be a breaking point” for the left-wing governing alliance headed by Prime Minister Antonio Costa.

Although the president has the power to dissolve parliament from early April, experts believe he is unlikely to move against the current government.

“The survival of the government is more threatened by the contradictions at the heart of the parties that support it than by the actions of the new president,” political analyst Antonio Costa Pinto told AFP.