LISBON (Reuters) – Portugal is wrongly following a policy of “austerity at any price” and will need at least an extra year to reduce its budget deficit to the target established under a 78 billion euro ($98.1 billion) bailout, the leader of the opposition Socialists said.

Antonio Jose Seguro warned that Europe must urgently find ways to help the weakest economies in the euro zone, but said Portugal would stay in the euro even if Greece exits the common currency.

“All the information I have shows me that Portugal has every condition (in place) to remain in the euro zone, even if Greece leaves,” Seguro said in an interview with Reuters.

He said Portugal should be given one more year to meet the budget goals agreed under the terms of its bailout, beyond 2013 when the country is envisaged returning to financing itself via the bond markets.

Portugal is currently the second most risky country in the euro zone after Greece, in terms of bond spreads comparing the yield of its government debt with that of Germany.

“I am defending (the idea that) Portugal needs at least one more year to carry out a healthy and intelligent consolidation of its public accounts,” said Seguro. “It is evident that the Portuguese cannot take any more measures, neither families nor companies.”

Seguro said he did not believe Portugal would need more bailout funds, as suggested by many economists.

LISBON, May 22 (Reuters) – Portugal may be rewarded with looser budget targets as its international lenders look to shore up the country’s slumping economy and the wider euro zone against contagion from turmoil in Greece.

The troika of lenders start their quarterly review of Lisbon’s economic performance under its bailout programme on Tuesday, having praised the country on previous visits for sticking to an increasingly onerous deficit-reduction target.

A raging European debate about how to combine growth and austerity stoked further by political deadlock in Athens means that this time they may also ease Portugal’s ambitious fiscal goals.

“It makes perfect sense to offer some relief to ensure that the austerity does not kill the patient,” said Rui Barbara, asset manager at Banco Carregosa.

“I think the troika realize that Portugal is doing everything it can,” added Lorne Baring, managing director at wealth manager B Capital in London. “I think it will get as much leniency as possible from its northern paymasters.”

Lisbon will also be mindful of flexibility granted to other nations at the sharp end of the debt crisis, with fellow bailout recipient Ireland having seen the cost of its official funding cut and neighbour Spain given more leeway on cutting its deficit.

In terms of debt spreads, Portugal is the second most vulnerable country in the euro zone after Greece, so the risks it faces in case of a market flare-up caused by a potential euro exit by Greece are great.

LISBON (Reuters) – Portugal’s unemployment rate jumped to a record high in the early part of this year even as the recession eased, showing the uphill struggle the country faces to nurse its way back to economic health while running a harsh austerity programme.

The jobless rate rose to 14.9 percent from 14.0 percent in the fourth quarter, the National Statistics Institute said on Wednesday.

Youth unemployment also rose further, to 36.2 percent from 35.4 percent, though is still below the 50 percent levels seen in Greece and Spain.

GDP data released on Tuesday showed the economy contracted by just 0.1 percent in the first quarter, below expectations of a slump of 0.7 percent.

“The (jobless) figures show that, despite the smaller than expected contraction in first quarter gross domestic product, economic conditions remain extremely challenging,” said Diego Iscaro, economist at IHS Global Insight in London.

The country is wrestling with its deepest recession since the 1970s as the government, which expects the economy to contract a further 3 percent this year, implements painful austerity measures imposed under the terms of a 78-billion euro EU/IMF bailout package.

“A very tight labour market will keep consumer spending, which is already being hit by tight fiscal policy and still high private debt levels, under significant pressure over an extended period,” Iscaro said.

PORTO, Portugal, May 9 (Reuters) – Spain and Portugal urged Greece on Wednesday to stick to its bailout programme and stay in the euro and promised to spare no effort in reducing their own budget deficits to ward off the growing euro zone debt crisis.

“I hope that Greece stays in the European Union and remains part of the euro project,” Spanish Prime Minister Mariano Rajoy told journalists after a summit with his Portuguese counterpart, Pedro Passos Coelho.

Passos Coelho said the Greek election result was “worrying” and urged the country’s politicians to establish a government in order to follow the terms of Athens’ second bailout.

The two leaders’ meeting was aimed at boosting cooperation between the Iberian nations but it was dominated by the euro crisis, which they said could only be overcome if countries first fix their debts and then turn to focus on economic growth.

“Let us be very clear, there is no economic growth without budget consolidation,” said Passos Coelho, whose country is under a 78-billion-euro bailout and is the second most risky nation in the euro zone in terms of bond spreads.

Both Spain and Portugal’s bond yields have risen sharply this week as Athens’ crisis turned for the worse after its inconclusive election at the weekend.

Spanish 10-year bond yields jumped above 6 percent on Wednesday on concerns the country could force its ailing banks to raise new money to cover property loans. Portuguese bond yields are around 11.4 percent, up from last weeks’ lows of below 10 percent.

LISBON, April 30 (Reuters) – Spain’s deteriorating economy has made Portugal’s job of riding out its debt crisis harder as its main trading partner slides into recession and the threat of contagion across the Iberian peninsula intensifies.

Portugal has seen relatively positive news in recent weeks, with bond yields falling and the country winning strong marks from official lenders to its 78-billion-euro bailout.

But as the euro zone debt crisis flares up again after several months of calm, this time with the epicentre in Spain, Portugal’s economic challenges could increase as the worst recession in decades gives rise to sweeping austerity.

“With 20 percent of Portuguese exports going to Spain, any kind of slowdown will be aggravated this year due to the austerity measures in Spain,” said Rui Barbara, asset manager at Banco Carregosa. “If you eventually need external help (for Spain), you could also get contagion.”

Data released on Monday showed that Spain, the euro zone’s fourth largest economy, dipped back into recession in the first quarter, raising pressure on Madrid in its efforts to trim the budget deficit. Spain’s troubles jumped into focus last week as Standard & Poor’s downgraded the country’s creditworthiness two notches to BBB+.

For Portugal, which spent much of last year fending off the negative impact of the Greek crisis, a renewal of the euro zone crisis so close to home could not have come at a worse time as the government rushes to quash concerns it will need an extension of its current bailout.

“This is bad news for Spain and bad news for Portugal,” said former Finance Minister Luis Campos e Cunha, referring to the downgrade of Spanish debt. “In fact, it all points to there being an extension of the bailout agreement for Portugal.”

LISBON (Reuters) – One could almost forget that Portugal is in the midst of a wrenching economic crisis looking at Prime Minister Pedro Passos Coelho’s popularity, a struggling opposition and foreign investors returning to the country.

The country is finally starting to see some benefits from tough austerity under a 78-billion-euro (65 billlion pounds) EU/IMF bailout, winning high marks for its economic reform drive and drawing investments that suggest light at the end of the tunnel.

Lisbon managed to sell new 18-month Treasury bills at an auction on Wednesday in a successful test of market appetite for the longest-dated debt issued since it was forced out of the bond market in March 2011.

A year since the previous centre-left Socialist government was forced to seek a bailout, Passos Coelho’s success in implementing the tough austerity plan without strong opposition has defied political gravity.

Centre-right parties won a snap election in June after Socialist Jose Socrates’ government collapsed, unable to enact policy as it lacked a parliamentary majority.

It fell to Passos Coelho to launch the deep spending cuts and tax hikes required by the bailout, which has sent Portugal into its deepest recession since the 1970s and pushed the jobless total to record levels.

Yet his centre-right Social Democrats remain almost as popular as when they were elected last June.

LISBON (Reuters) – One could almost forget that Portugal is in the midst of a wrenching economic crisis looking at Prime Minister Pedro Passos Coelho’s popularity, a struggling opposition and foreign investors returning to the country.

The country is finally starting to see some benefits from tough austerity under a 78-billion-euro ($103 billion) EU/IMF bailout, winning high marks for its economic reform drive and drawing investments that suggest light at the end of the tunnel.

Lisbon managed to sell new 18-month Treasury bills at an auction on Wednesday in a successful test of market appetite for the longest-dated debt issued since it was forced out of the bond market in March 2011.

A year since the previous centre-left Socialist government was forced to seek a bailout, Passos Coelho’s success in implementing the tough austerity plan without strong opposition has defied political gravity.

Centre-right parties won a snap election in June after Socialist Jose Socrates’ government collapsed, unable to enact policy as it lacked a parliamentary majority.

It fell to Passos Coelho to launch the deep spending cuts and tax hikes required by the bailout, which has sent Portugal into its deepest recession since the 1970s and pushed the jobless total to record levels.

Yet his centre-right Social Democrats remain almost as popular as when they were elected last June.

LISBON (Reuters) – Portuguese strikers halted trains, shut ports and paralyzed most public transport on Thursday, but the limited scale of the protest against austerity measures seemed unlikely to weaken the government’s resolve in implementing the terms of an EU/IMF bailout.

There was little impact beyond the transport sector from the strike that caused no major output disruptions at companies. The country’s second-largest union, UGT, did not back the strike, unlike in previous work stoppages.

Armenio Carlos, the new Communist leader of CGTP, the country’s largest union confederation, wants its 700,000 members to send a signal to the centre-right government that the country will no longer tolerate the erosion of workers’ rights, lower salaries and record high unemployment.

“We have to keep staging strikes, struggling. These policies do not resolve anything, we are on the same path as Greece,” said Pedro Ramos, 38, a union coordinator who works for a state waste management company.

Ramos was one of a few hundred CGTP members who marched from Rossio square in downtown Lisbon to parliament. Many were singing old Communist songs from the bloodless Carnation revolution of 1974 that re-established democracy in Portugal.

Asked about the turn-out, he shrugged his shoulders, saying “it’s so-so”. Other groups were meeting in other points of Lisbon, but their numbers were far below those in last month’s peaceful rally that brought together over 100,000 protesters.

A small group of young protesters clashed with police for a few minutes and two photographers covering the events were caught in the scuffles as the police charged the group. A police spokesman said one protestor was arrested and three people were injured, including a police officer.

LISBON (Reuters) – Portuguese workers halted trains, shut ports and paralyzed most public transport in the capital Lisbon on Thursday in protest at austerity measures and labor reforms imposed as a condition of a 78-billion-euro ($103 billion) bailout.

“Occupy the streets, block everything” is one of the slogans adopted by the workers, who say the reforms turn the clock back on employment rights, ramp up joblessness and erode living standards.

Portugal’s largest union, the CGTP, aims to bring the country to a standstill, but the Portuguese have so far shown little interest in imitating the kind of protests seen in Greece. One trade union, the UGT, the country’s second-largest, has signed up to the reforms, and private sector workers have been reluctant to commit to the strike.

Portugal, facing its worst recession since the 1970s, was forced to take a bailout from the European Union and International Monetary Fund in May last year after running up large debts. Some economists say it might need a second bailout as the recession deepens, putting its budget targets in doubt and jeopardizing its planned return to the bond markets late next year.

Strike organizers said the country’s railway transport was paralyzed, including the international Lisbon-Madrid route. Lisbon’s underground was shut at midnight. Many hospitals were only accepting emergencies.

The centre-right government is betting that relative public apathy will help it impose painful spending cuts and policy reforms to drag the country out of its debt crisis.

The UGT, which is allied to the opposition Socialist Party, has urged opponents of austerity to show restraint, warning that Portugal could descend into the kind of chaos seen in Greece.

LISBON, March 22 (Reuters) – Portugal faces a general strike by workers angered by austerity measures imposed as a condition of a 78-billion euro bailout last year but doubts remain as to whether Thursday’s stoppage will receive widespread support.

Portugal’s largest union, the CGTP, hopes to mobilise mass support but the Portuguese have shown little interest in imitating the kind of protests seen in Greece, despite record unemployment and the worst recession in decades.

Some economists fear Portugal may be pushed into seeking a second bailout from its European partners, but the centre-right government is betting that relative public apathy will help it impose painful spending cuts and policy reforms in order to drag the country out of its debt crisis.

The second largest union, the UGT, is not backing Thursday’s strike and has signed up to labour market reforms that the strikers say will roll back hard-won workers’ rights.

The UGT, which is allied to the opposition Socialist Party, has urged opponents of austerity to show restraint, warning that Portugal could descend into the kind of chaos seen in Greece.

But the CGTP’s new Communist leader, Armenio Carlos, is eager to put up a fight against spending cuts, salary reductions and the erosion of workers’ benefits under the reforms imposed as a condition of last May’s bailout from the European Union and International Monetary Fund.

Those preparing to strike say the new labour laws, which make it easier to hire and fire staff and which cut compensation for workers, mark the biggest step backwards for workers since Portugal’s return to democracy in 1974 after military rule.