Portugal's president appoints Coelho to lead

Portuguese President Anibal Cavaco Silva announced on Thursday that he appointed center-right coalition leader Pedro Passos Coelho, who served as the country's prime minister for the past four years.

"I have designated Mr. Passos Coelho as prime minister because he is the head of the coalition which won the October 4 parliamentary elections.

Coelho's center-right coalition won the majority in the Portuguese parliamentary elections in early October with 38.4 percent of the vote.

A catastrophic future?

However, the center-right group failed to win an outright majority, prompting Socialist leader Antonio Costa to launch talks with the Communists and radical Left Bloc, both of which oppose the euro currency.

"I have to tell the Portuguese that I fear a loss of confidence (in Portugal) by foreign institutions, our creditors and investors in foreign markets. The confidence and the credibility of our country are essential for investment and job creation," Cavaco Silva noted.

"Out of the EU and the eurozone, Portugal's future would be catastrophic," the president said, adding that it would undo four years of austerity that pulled the country out of a 78-billion-euro bailout program amid signs of economic recovery.

'Instability'

Prime Minister Silva has 10 days to form a four-year program, after which it must be submitted to parliament for approval.

Controlling 122 out of 230 seats, the three center-left parties led by Socialist leader Costa have vowed to reject the program, which would effectively bring down Silva's government.

"The president will have to take the responsibility for the instability that will be created by this decision," Left Bloc lawmaker Filipe Soares said in response to the president's decision.

ls/bw (AP, AFP, Reuters)