A week of talks by Portugal's three
main parties on how to end a political crisis has broken down, leaving the
country's bailout programme in doubt. President Anibal Cavaco Silva is seeking a "national salvation" deal to back
austerity policies demanded by EU and IMF lenders. But opposition leader Antonio Jose Seguro said the governing coalition had
rejected most of his party's proposals.
He said it was now up to the president to decide how to end the crisis. It began nearly three weeks ago with the resignation of the finance and
foreign ministers.
Foreign Minister Paulo Portas was unhappy with the extent of the austerity
measures needed to comply with the conditions set in the 78bn euros ($102bn;
£67bn) bailout received in May 2011.
Finance Minister Vitor Gaspar - seen as the architect of austerity - quit
because of a lack of support for his approach.
Lisbon has had to request a delay in the eighth review of the bailout by its
creditors. The review was due to start last Monday but has been put back until
the end of August or early September.
Coalition parties made no comment in the immediate aftermath of the talks on
Friday.
However, socialist leader Mr Seguro told reporters: "There were two different
visions to exit the crisis. That being clear, it made no sense to continue
negotiating for the sake of negotiating."
Analysts say the president could still avoid an escalation of the crisis by
keeping the governing coalition in place rather than calling a snap
election.
The austerity cuts are widely blamed for keeping Portugal in recession over
the past two years, angering trade unions and left-wing parties and causing a
wave of street protests.
On Friday, Portuguese government bonds had outperformed others in Europe on
hopes of a deal.
The BBC's Alison Roberts in Lisbon says there are now fears that the markets
will take a tumble on Monday
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