Portugal gov't punished for austerity measures

Staff Writer
Columbus CEO

LISBON, Portugal (AP) — Portuguese voters angry about austerity have punished the coalition government's senior party in municipal elections.

The center-right Social Democratic Party recorded its worst local election defeat in more than two decades in Sunday's ballot.

Meanwhile, the main opposition Socialist Party claimed its biggest success in the nationwide elections for mayors and councilors.

Even so, Social Democrat leader and Prime Minister Pedro Passos Coelho says he can't halt his unpopular program of tax hikes, pay and pension cuts and reductions in public services.

Portugal agreed to enact those austerity measures in return for a 78 billion-euro ($105 billion) bailout two years ago.

But an expected third straight year of recession in 2013 and a jobless rate of 16.5 percent have turned many people against the bailout agreement.