News: Portuguese Prime Minister resigns

Portuguese Prime Minister Jose Socrates has resigned after the government rejected his plans to avoid a bailout. All five opposition parties voted against his proposed austerity budget. The Prime Minister had earlier stated that he would not be able to run the country if the budget wasn't put in place. He also said that Portugal is the real loser in the decision to not have an austerity budget. Jose Socrates presented his resignation to President Anibal Cavaco only two hours after the vote in parliament.

People supporting the plan said that by rejecting the plan Portugal could be thrown into turmoil. However members of parliament who were against the budget were arguing that all of Socrates’ plans have failed and it is time for change. They also said that the government’s policies have increased poverty.

Taxes are already high enough and this austerity budget would have helped to steady the flow of government spending and general population spending but it would have caused chaos for low-income residents.

I think that Jose Socrates made the right decision in resigning his position. I believe that Portugal may be thrown even deeper into its current financial crisis. The austerity budget would not have helped low-income residents and Jose Socrates had run out of ideas to save the country from its financial crisis. Portugal’s borrowing costs have risen and investors are worried about its financial health. This will have a huge impact on Portugal’s finance and cost of lending. 

austerity budget: A national budget which aims to reduce the amount of money that people spend, for example by increasing taxes, or to reduce the amount that the government spends.