Portuguese parties remain divided over austerity

Effort at political consensus fails in bailed-out Portugal as austerity divides parties

Associated Press

LISBON, Portugal (AP) -- Portugal's main opposition Socialist Party says its differences with the government over economic policy are insurmountable and prevent the forging of a political consensus that the country's bailout creditors would like to see.

The center-right coalition government is enacting series of budget cutbacks and tax increases, as well as economic reforms, in return for a 78 billion euro ($102 billion) rescue Portugal received in 2011.

However, unemployment has risen to 17.8 percent and a third straight year of recession is expected in 2013. That record has left the government isolated and under pressure.

Senior Socialist official Alberto Martins said after an hour-long meeting with the governing parties Thursday that his center-left party is demanding less austerity, more growth policies and early elections to choose a new government.

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