LISBON, Portugal (AP) — Portugal's government was in danger of collapse Tuesday after Foreign Minister Paulo Portas, the leader of the junior party in the center-right coalition government, resigned over the bailed-out country's austerity policies.
Portas' announcement of his departure in a written statement came a day after Finance Minister Vitor Gaspar also quit.
Though Portas did not say whether his party would pull its support from the government, the resignations pitched what for two years had been a stable administration into disarray within the space of 24 hours. It recalled the political strife that has dogged Greece's efforts to recover from its own bailout.
The uncertainty about the government's future looked set to create a further headache for efforts by the 17 countries that share the euro currency to emerge from a financial crisis that has tormented them for more than three years, as austerity meets growing resistance from politicians, trade unions and business leaders.
Austerity is widely blamed for driving the jobless rate in Portugal to 17.6 percent and for what is forecast to be a third straight year of recession in 2013.
Portugal needed a 78 billion euros ($102 billion) bailout two years ago after a decade of weak growth and mounting debt pushed it to the verge of bankruptcy.
Portugal is now locked into a deficit-reducing program demanded by its bailout creditors — the International Monetary Fund and other EU countries. If Portugal doesn't abide by the terms of the bailout agreement, the creditors can halt disbursements of the rescue loans.
Portugal's government debt stands at almost 124 percent of gross domestic product, the third-highest in the EU after Greece and Italy. Its deficit last year was 6.4 percent — above the 5 percent target but below the 2010 figure of 10.1 percent.
Portas had repeatedly spoken out against former finance minister Gaspar's strategy of public sector pay and pension cuts and tax hikes. But Gaspar had the support of prime Minister Pedro Passos Coelho, head of the Social Democratic Party, the coalition's senior member.
Portas, who has demanded more measures to stimulate economic growth, said he disagreed with Passos Coelho's choice of Maria Luis Albuquerque to replace Gaspar. Albuquerque has endorsed the austerity which Portas wants eased.
"I respect (Albuquerque's appointment) but disagree with it," Portas said in the statement sent to reporters. He said that remaining in the government would be "politically unsustainable."
Portas did not say whether he would take his Popular Party out of the government — a step which would leave it without a parliamentary majority to push through its policies.
Passos Coelho's office said the prime minister would make a live television address to the nation later in the evening.
Portas's statement came out around 30 minutes before Albuquerque, the new finance minister, was sworn into office in a ceremony at the presidential palace and appeared to cause deep unease among Cabinet members attending the occasion, including Portas in his final official event. They declined to comment to reporters.