Portugal PM Jose Socrates resigns after budget rejected

BBC News, 23 March 2011

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Portuguese Prime Minister Jose Socrates has resigned after parliament rejected an austerity budget.

Prime Minister Socrates said the
opposition had rejected the
government's plans to avoid a
bailout

All five opposition parties voted against the measures, intended to stave off the need for a bailout similar to those granted to Ireland and Greece last year.

Mr Socrates had earlier said he would no longer be able to run the country if the budget was not adopted.

Elections are likely to take place in a few months' time.

The defeated budget included proposals for spending cuts and tax rises. Opposition parties said it went too far.

The budget was the fourth package of austerity measures in a year. Its rejection is likely to trigger an international financial bailout.

EU summit

"Today, every opposition party rejected the measures proposed by the government to prevent that Portugal resort to external aid," Mr Socrates said in a televised address.

"The opposition removed from the government the conditions to govern."

The vote late on Wednesday came on the eve of a European Union summit to finalise a eurozone debt crisis plan.

On Thursday, Eurozone leaders begin a two-day summit during which they hope to finalise details of a "grand bargain" to deal with the 17-nation group's debt burden.