March 24, 2011
Portuguese President Aníbal Cavaco Silva will begin meetings Friday with the leaders of all the political parties represented in parliament, the first step of a process that is expected to lead to early elections after Prime Minister José Socrates handed in his resignation Wednesday when opposition parties voted down an austerity package.
The failure to pass the measure pushed already high government borrowing costs to unaffordable levels and threatened to force Portugal to follow Greece and Ireland in seeking an international bailout.
Late Thursday, Fitch Ratings downgraded Portuguese debt two notches. Fitch said it assumes Portugal can't maintain affordable market access and sees a higher risk of the country needing multilateral support. Fitch cut Portugal's sovereign credit rating to single-A-minus from single-A-plus.
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