Portugal's Social Democrats face up to debt

The centre-right Social Democrats had little time to savour their return to power yesterday, immediately starting to tackle Portugal's ruinous debt burden and shrinking economy.

Pedro Passos Coelho won an emphatic victory in Sunday's poll, his party collecting 39 per cent of the vote. The Socialist Party, which had governed for the past six years, was second with 28 per cent.

Mr Coelho's new government inherits a record jobless rate of 12.6 per cent and an expected economic contraction of 4 per cent in the next two years.