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Portugal’s Socrates Still Heads Socialists, Will Oppose Bailout in Election

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Jose Socrates, who resigned as prime minister of Portugal after austerity measures proposed by his Socialist party were defeated in a parliamentary vote, was reelected on Sunday by his party with 93% of the vote. He pledged to run in opposition to acceptance of a financial bailout, characterizing it as “foreign aid,” and roundly criticized the opposition party, whose vote against austerity measures led to the political crisis last week.

Reuters reported that Socrates was reelected as secretary general of the Socialist party and in the wake of the vote said, "I am here to face the judgment of the Portuguese. I am not afraid and I will fight for victory." He went on to add, "It is the moment for the Portuguese to choose between those who want a foreign aid program, those who want the IMF [International Monetary Fund] to come, and those who will give everything, their best for Portugal to not have to ask for foreign aid."

Portugal is faced with a debt repayment burden in the next few months that many analysts believe is questionable. While economists are mostly agreed that the country can handle its April obligations for some 4.3 billion euros ($6.05 billion) in bonds, June is the target for an additional 4.9 billion euros’ worth. The premium on Portugal’s debt is running at record levels in the wake of the government crisis; last week it topped 8%, which is considered unsustainable. After the austerity vote failed and Socrates stepped down, both Fitch’s and Standard & Poor’s downgraded the country’s rating.

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Socrates had accused the opposition party, the Social Democrats (PSD), of setting off the crisis without offering any way around the need for the austerity measures they opposed. He also said they had "already surrendered to aid from the IMF." Currently the PSD leads in public opinion polls.

However, Pedro Passos Coelho, leader of the PSD, was quoted in the report as saying on Saturday that his party was committed to meet the budget goals that had been agreed on with Brussels, and added, referring to a bailout, "I think we must avoid a situation like that." He also raised the possibility of a bridge loan that could be sought by the caretaker government before new elections are held, should such a measure become necessary for Portugal to meet its obligations.