By BARRY HATTON, Associated Press
LISBON, Portugal (AP) — Portugal's president widened the scope of his political consultations Tuesday before deciding whether to call early elections or leave in place a coalition government rocked by resignations.
Differences over the scale of austerity measures following a 78-billion-euro ($100 billion) bailout in 2011 triggered the resignations of the finance and foreign ministers last week.
Portugal's troubles were an unwelcome development for the 16 other nations that share the euro currency as they try to put their financial crisis behind them. More than three years of debt-cutting has contributed to a broad economic slowdown, and political friction in Portugal could hurt efforts to restore market faith in the eurozone.
Senior European officials monitoring Portugal's compliance with its bailout agreement are keen for the country to stay the course on deficit-reduction policies. Holding elections would consign Portugal to two months of virtual political paralysis, making it hard for the country to meet obligations it accepted under the bailout program.
"Political stability, continuity, are essential, particularly in the current situation," Jeroen Dijsselbloem, who chairs eurozone finance ministers' meetings, said in Brussels on Tuesday.
He said he expected Portuguese President Anibal Cavaco Silva to announce his decision later this week.
Prime Minister Pedro Passos Coelho has presented the president with plans for a Cabinet reshuffle to heal the rift between the coalition partners and, he hopes, persuade the head of state to keep his government in place.
European officials have said the new finance minister, former treasury secretary Maria Luis Albuquerque, is an acceptable choice for them.
Paulo Portas, head of the Popular Party which is the junior coalition partner, said after meeting with the president that the reshuffle would provide a "solid" solution to end the current political woes.
Portas quit as foreign minister in disagreement with plans for more deep cuts. Under the reshuffle, he would become deputy prime minister and play a more central role in drawing up government policy. He said he wanted a new emphasis on job creation and economic growth as the country weathers an expected third straight year of recession amid a jobless rate of 17.6 percent.
Together, the coalition parties have 132 seats in the 230-seat Parliament, providing them with a majority of votes to push through legislation.
All the country's opposition parties, however, are pushing for an election two years ahead of schedule.
Antonio Seguro, leader of the main opposition Socialist Party, said divisions in the government proved that a parliamentary majority alone does not ensure political stability.
"The solution, as we see it, is to give the country a cohesive, competent government which inspires confidence," Seguro said after meeting with the president.
However, the Socialists were in power when Portugal needed a bailout to avoid bankruptcy and their role in the causes of the economic crisis has weakened their arguments.
The head of state, though he has no executive power, is tasked by the Constitution with ensuring the country has a stable government.
Cavaco Silva was continuing talks with political parties on Tuesday. His office said he would also meet with business leaders and trade unions through Wednesday.
Before he can call a snap election the president must convene the Council of State, an advisory body made up of leading public figures.
If he chooses to dissolve Parliament, a ballot could not be held until 55 days after the announcement of his decision.
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