Lisbon: Portugal will hold early general elections on June 05, after the struggling eurozone member hit a political impasse over austerity measures, President Anibal Cavaco Silva announced.
"I have decided today to accept the resignation which was handed to me by the Prime Minister and to call Legislative Elections for June 05," he told reporters late Thursday.
The decision came eight days after Prime Minister Jose Socrates, a socialist, resigned when Parliament rejected a new austerity programme put forward by his minority government.
"This election will take place at a critical moment for the life of the country," said the President.
As provided for by the Portuguese Constitution, Cavaco Silva had already consulted all the political parties represented in the Assembly who were unanimous in favouring early Legislative Elections.
Since the political crisis broke, Portugal has been under growing pressure from the financial markets and the ratings agencies, worried about the solvency of the country.
Although the cost of borrowing has risen, Socrates has continued to rule out seeking external aid, as Greece and Ireland were forced to do last year.
The caretaker government does not have the right to negotiate an international bailout for the country`s ailing economy, Finance Minister Fernando Teixeira dos Santos said earlier.
"This government does not have the legitimacy, nor the conditions to negotiate in this way," he told a press conference.
Teixeira dos Santos was speaking after the release of official figures showing that Portugal`s public deficit stood at 8.6 percent of gross domestic product last year, well above the 7.3 percent government objective.
An opinion poll last week suggested that the centre right could win an absolute majority in an election with 46.7 percent of the vote against the socialists` 24.5 percent.
Teixeira dos Santos ruled out that his country was running "a serious risk of bankruptcy" but added that he was "no longer so sure" that Lisbon could avoid asking for outside assistance.
"I do not think that bankruptcy is a serious risk," he told private TVI television.
Socrates` outgoing government "must secure the means for the country to fulfil its obligations", he added.
"We must be more creative," he said but did not elaborate.