Since 17 March 2002, Portugal has been ruled by a right-centre coalition government, consisting of the liberal-modernist social democratic party Partido Social Democrata (PSD) led by EU Commission President designate Josê Manuel Durao Barroso, and the conservative-Eurosceptic Democratic Social Centre-People’s Party (Centro Democratico e Social-Partido Popular – CDS-PP) led by populist Paulo Portas. The governing coalition came to power after the resignation of the socialist prime minister Antonio Guterres following big losses in the local elections on 14 December 2001. President Jorge Sampaio, after consulting the main political forces and the state council, then called for early elections. In March 2002, Barroso’s PSD was unable to win an absolute majority and formed a coalition with the CDS-PP. The right-centre coalition campaigned with an austerity programme to cut the budget deficit, which exceeded the previous Guterres’ government limit of 3 per cent of GDP set up by the EU Growth and Stability Pact. Indeed, in July 2002 the EU Commission estimated Portugal’s budget defi cit at 4.1 per cent. Finance Minister Manuela Ferreira Leite introduced public sector cuts, especially in the oversized public administration. This simply added to the already dire economic recession. Austerity persisted throughout 2003 with negative growth and accelerating unemployment by the end of the year.
KeywordsCommunist Party Coalition Government Socialist Party European Election Coalition Parti
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