6 Jun 2011

Ruling party defeated in Portugal

3:20 pm on 6 June 2011

Portugal's governing Socialist Party admitted defeat in a general election on Sunday.

Exit polls on Sunday gave the PSD between 37% to 42.5% of the vote, ahead of the Socialists who scored between 24.4% to 30%.

Acting prime minister Jose Socrates said he accepted responsibility for the defeat and resigned as head of his party.

''This defeat is entirely mine and I want to assume full responsibility for it,'' Mr Socrates said in Lisbon.

The Social Democrats led by Pedro Passos Coelho are expected to form a majority with the CDS Party.

The BBC reports the new government has to implement an austerity programme as a condition for a bail-out by the European Union.

All the main parties back the 78 billion euro ($US116 billion) bail-out, which requires tough austerity measures amid a faltering economy and a debt crisis.

Portugal is faced with unemployment of more than 12% and an economy that is expected to contract by 2% this year and next.