Portugal committed to bailout terms

Portugal's prime minister-elect Pedro Passos Coelho said today he was "absolutely" committed to the terms of a €78-billion bailout…

Portugal's prime minister-elect Pedro Passos Coelho said today he was "absolutely" committed to the terms of a €78-billion bailout and may pursue austerity measures beyond those required by the pact.

Having won yesterday's general election, the centre-right Social Democrats (PSD) leader said he would seek a broad coalition with the rightist CDS-PP party "in record time".

"Portugal needs to return to creating a wave of confidence in the markets," Mr Passos Coelho said in an exclusive interview.

"I think we can surprise and go beyond the (bailout) agreement."

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The collapse in March of a minority Socialist government aggravated Portugal's long-running debt crisis, with investors dumping bonds and borrowing costs spiralling to euro-era highs.

Like Greece and Ireland, Portugal was forced to seek a bailout.

Mr Passos Coelho said Portugal would now "do the work that is necessary, for the time that is necessary, so that the most important measures can be taken and that all deadlines in the agreement with the European Union and IMF can be respected".

Conditions for the aid include austerity measures such as big tax rises and deep spending cuts, with quarterly benchmarks.

The PSD has often called for curbing Portugal's public sector, and Mr Passos Coelho said his government would set an example by cutting costs in the administration.

"We know that now we are a burden on our partners," he said. "We don't want to weigh down our (European) partners for a day or a second more than necessary."

Mr Passos Coelho said it was up to the country's president, Anibal Cavaco Silva, to decide how quickly a new government can take over. He will meet Mr Cavaco Silva later today.

"I will be in a position to present a government in record time," he said. "The negotiations can take place very quickly."

He added that measures could be adapted to speed the passage of reforms. Among proposals put forward by analysts has been compelling parliament to work through the summer.

Reuters