Faltering Portugese government quits

LISBON, Portugal -- Portugal, already reeling from an alarming economic decline, plunged deeper into crisis Saturday when the conservative government quit a day after the president dissolved Parliament and called an early general election.\nThe chaos in government will translate into months of political paralysis that Portugal, one of the European Union's poorest nations, can ill afford. The crisis will only further delay essential and long-deferred reforms devised to halt the nation's economic slide.\nPrime Minister Pedro Santana Lopes announced the government's decision Saturday after an emergency Cabinet meeting. It was a rebuke to Socialist President Jorge Sampaio, who said Friday he was dissolving Parliament and convening early elections Feb. 20.\nSampaio already announced his intention to call elections after weeks of feuding within the Cabinet. A series of public gaffes and organizational foul-ups had beset Santana Lopes' conservative administration since it took office in July.\nSampaio said Friday he had been forced to act to resolve "a grave crisis of credibility and instability" in the government.\n"It would be bad if after last night's words from the president we kept the same posture and attitude," Santana Lopes said.\n"We will undertake our responsibilities, but as a caretaker government. I present here the resignation of Portugal's 16th Constitutional government."\nHe said he would meet Sampaio on Monday to formalize the government's resignation.\nSantana Lopes, a former mayor of Lisbon, replaced Jose Manuel Barroso, who left office four months ago to become president of the European Commission.\nAt the time, Sampaio rejected appeals from opposition parties for a general election. However, Santana Lopes' term in office has been riddled with problems.\nThe school year was delayed by weeks because the Education Ministry was late assigning teachers to schools; the Finance Minister Antonio Bagao Felix publicly disagreed with Santana Lopes over tax cuts; and the government locked horns with the media for allegedly trying to muzzle its critics at newspapers and TV networks.\nWith Portugal facing the prospect of electing its third prime minister in eight months, a lack of political continuity is damping hopes for economic recovery. Portugal, one of the European Union's smallest and poorest members, is being left behind by the rest of the bloc.\nRecent figures show the country's economic growth has lagged behind the EU average for the past four years and indicate it will continue to do so for at least another two, despite billions of dollars in development aid from EU headquarters in Brussels, Belgium.\nThe economy is such a mess that Portugal, one of the original 12 EU nations, trails newcomers Slovenia and Cyprus in gross domestic product.\nIt currently is flailing to find a way out of a recession that was the worst in the EU last year, when the economy contracted 1.3 percent.\nIn recent years, international bodies such as the World Bank have repeatedly pressed the country to proceed with potentially painful and unpopular economic and social reforms, many of them to correct outdated legislation introduced after a 1974 military coup brought democracy.\nThe conservatives came to power in 2002 and said they were determined to jettison antiquated practices that keep Portugal out of sync with modern Europe. Despite their blunders, the government was in the process of setting in motion a raft of bold reforms to turn the nation around economically.\nThe government had pledged to whittle down the bloated and inefficient civil service and revamp the maddeningly slow legal system.\nPlans to cut personal income tax and corporate tax are now on hold.\nIf the government had stayed in office until the Feb. 20 ballot, it still could have enacted legislation already approved by Parliament.\nNow, though government ministers are expected to keep working until the election, they will manage only the day-to-day running of the country and may not carry out pay rises and tax cuts foreseen in their 2005 state budget, approved by Parliament last week.