STEVE INSKEEP, Host:
Portugal is among several European Union countries that have come so close to financial collapse that they needed a bailout. Yesterday, Portugal elected a new government which has a strong mandate to enact the tough deficit-cutting measures required for an international bailout. NPR's Sylvia Poggioli joins us now from Lisbon. Good morning.
SYLVIA POGGIOLI: Good morning, Renee.
MONTAGNE: So tell us who won the election and what kind of government will come out of that.
POGGIOLI: The outgoing Prime Minister Jose Socrates, he admitted defeat shortly after the first exit polls were announced, and he said he would resign as Socialist Party leader.
MONTAGNE: Tell us more about that deficit-cutting program the government will now have to enact.
POGGIOLI: It's already been forecast that Portugal's economy will contract by four percent in two years and that means a very sharp decline in living standards in what is already Western Europe's poorest country. And like Greece and Ireland and neighboring Spain, Portugal will have to slash its deficit in the midst of a recession, and at the same time try to simulate growth. So the new center right government is going to need all the consensus it can get.
MONTAGNE: Well, we've seen big protests in Greece. How are the Portuguese facing this economic crisis?
POGGIOLI: And you hear people talking about a growing north-south rift in European Union, and northern prejudice against southerners. Many people were angered by German Chancellor Angela Merkel's recent claim that the Portuguese have too many holidays when it turns out that the Germans who have more holidays.
MONTAGNE: We've been talking to NPR's Sylvia Poggioli, from the Portuguese capital of Lisbon. Thanks very much.
POGGIOLI: Thank you, Renee.
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