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Portugal PM says ready for deal with opposition

Portugal’s Prime Minister Pedro Passos Coelho said Friday he was open to striking a deal with the opposition over the nation’s 78-billion-euro ($100-billion) bailout programme.

Fresh from a political crisis over hated austerity policies that nearly toppled his centre-right coalition, the premier told parliament he was ready to cooperate with the opposition Socialists.

“Let’s make an agreement that corresponds to everyone’s wishes: successfully concluding our assistance programme in June 2014,” he said in a debate on the state of the nation.

The prime minister had to reshuffle his cabinet after two shock resignations last week over hated austerity policies squeezing the recession-struck, heavily indebted eurozone nation.

But the new-look coalition between his Social Democrats and its junior partner, the conservative CDS-PP, won only tepid support from Portugal’s President Anibal Cavaco Silva.

The head of state said Wednesday the ruling team had “all the authority to exercise its functions” but made no mention of the reshuffle.

Instead, he urged a new agreement for the “health of the nation” between parties that back the bailout programme, accompanied by early elections to be held in a year.

In the midst of such uncertainty, Portugal on Thursday asked its troika of creditors — the European Commission, European Central Bank and IMF — to postpone a planned July 15 visit to Lisbon until the end of August.

At the heart of the crisis is a dispute over the painful spending cuts and tax increases enacted as a condition of the bailout, which was agreed with the troika in May 2011.

The financial rescue programme was negotiated by the Socialist Party when it was in power but has been implemented by the centre-right coalition, which won snap elections in June 2011.

The austerity measures are widely blamed for exacerbating Portugal’s three-year recession, however, and the resulting hardship has sparked growing street protests.

Portugal forecasts a 2.3-percent economic contraction this year and has a record unemployment rate of more than 18 percent.