July 17, 2013 / 5:17 PM / 4 years ago

Signs of progress in Portugal crisis talks, businesses urge speed

LISBON (Reuters) - Portugal’s main parties, scrambling to resolve a political crisis and keep the country’s EU/IMF bailout on track, agreed on Wednesday to hold an extraordinary session of parliament on July 29 to discuss any deal they reach.

The two parties of the centre-right ruling coalition and the Socialists have been in talks since Sunday after the president insisted on a broad political solution to a crisis caused by a rift within the ruling alliance over austerity policies.

The three sides have given themselves until Sunday to reach a deal to support the bailout until it ends in mid-2014, when President Anibal Cavaco Silva also wants to hold an early election.

A major union and business lobbies urged the parties to reach an agreement quickly for the sake of the economy and public.

The 500,000-strong UGT labour union and groups representing industry, trade, agriculture and tourism urged them “to leave aside momentary partisan interests to achieve a quick, consistent and realistic understanding”.

Portugal’s one-year borrowing costs jumped by over a third on Wednesday in a Treasury bill sale as investors worried Lisbon may require a new bailout that could involve losses for debt holders.

Socialist parliamentary bench leader Carlos Zorrinho said it was still too early to predict the outcome of the talks.

“For now it is uncertain (if there will be a deal), we don’t know what the dialogue will lead to,” he told reporters, but added: “We are in this process with good will.”

The Socialists have called a meeting of their top political commission for Thursday night, in parallel with the main ruling Social Democrats, in what analysts saw as a good sign.

“I think the leaders will get a go-ahead from their parties to finalise the negotiations,” said Adelino Maltez, a political scientist at Lisbon’s Technical University.

In another move supporting hopes for a deal, the Socialists rejected a call from the small Left Bloc party for a left-wing alliance jointly with the Communist party.

Reporting by Andrei Khalip; Additional reporting by Shrikesh Laxmidas; Editing by Jason Neely

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