Portugal's opposition agrees to budget goals

Portugal's caretaker government could seek a bridging loan if the country's financial crisis escalates, the leader of the opposition Social Democrats (PSD) said yesterday.

Pedro Passos Coelho said his party is fully committed to meeting budget goals agreed with Brussels. But he added that if there is an "emergency situation and there is a need for an emergency loan to avoid a Portuguese default situation" before an expected election in June, the caretaker government has the power to seek one.

Portugal slid into political crisis this week as the Socialist minority government resigned after Mr Passos Coelho's PSD and other opposition parties rejected austerity measures in parliament. The Socialists will remain as a caretaker government for now. There are concerns in financial markets that the political limbo, which will remain until an election, could make it difficult for Portugal to finance itself in debt markets, especially as it has to meet a bond payment in April of €4.5bn (£4bn). Another payment of a similar size is due in June.