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Political crisis could hasten financial bailout: Portugal

A political crisis in Portugal brought on by harsh austerity measures needed to meet EU budgetary demands could push Lisbon into requiring an international bailout, the country’s finance minister said Monday.

“If we enter a political crisis at this point, that will create great difficulties for the country to access financial markets and I believe that would place at risk our capacity for self-financing,” Fernando Teixeira dos Santos said on arrival for talks among eurozone ministers on the size, shape and scope of a permanent rescue mechanism for troubled economies.

“Right now, the political crisis is effectively helping to push the country into the arms of external aid,” he added.

Dos Santos was speaking after the head of Portugal’s main opposition party said negotiations with the minority government over its plans to impose more austerity measures were on hold.

“There are no conditions of confidence in which to hold negotiations,” said Pedro Passos Coelho, the leader of the centre-right opposition PSD party.

Prime Minister Jose Socrates has said he will resign if the package is rejected.

The new austerity measures were due to be submitted to parliament on Monday and be debated on Wednesday. The opposition was expected to try to force a vote on the measures.