100 Portuguese business leaders decry political uncertainty

Staff Writer
Columbus CEO

LISBON, Portugal (AP) — One hundred Portuguese business leaders have signed an open letter expressing concern about the country's ongoing political uncertainty and warning it could hurt the economy if it goes on much longer.

With Portugal's new government barely a week old and larger opposition parties vowing to force its resignation within days, the letter published Friday said the uncertainty is jeopardizing a fragile economic recovery.

The letter's signatories, who lead some of Portugal's biggest companies, said the political climate is a threat to their investment and hiring plans. They noted that the current annual growth rate of 1.5 percent is "modest," though better than the average rate of 0.7 percent recorded from 2000-2010, and required nurturing.

Portugal's center-right government is due to present its policy program in a two-day parliamentary debate starting next Monday. Three left-of-center parties, who together have more votes than the government, say they will unite to force its resignation by rejecting the program.

At the heart of the political friction are the austerity policies introduced after debt-heavy Portugal's 78 billion euro ($85 billion) bailout in 2011 amid a financial crisis gripping countries sharing the euro currency. The government says public spending must remain frugal to lower debt. Its opponents — the moderate Socialist Party, the radical Left Bloc and the Communist Party — want to ease austerity and reverse pay and pension cuts.

Prime Minister Pedro Passos Coelho said Friday he is ready to negotiate policies with the Socialists but added that "any more government spending needs to be counterbalanced," either by savings elsewhere or through taxes.

The Left Bloc announced late Thursday it has reached a written agreement on future government policies with the Socialists but gave no details. The Socialists are still negotiating a formal deal with the Communists.