New coalition agreement in Portugal could result in relaxed deficit targets from Troika

A new coalition agreement in Portugal could result in a new compromise with the Troika (the EU, the IMF and the ECB), including relaxed deficit targets and deadlines, a source close to the process has told Diario Economico.

Portuguese prime minister Pedro Cassos Coelho and foreign minister Paulo Portas have just concluded their second meeting of the day in an attempt to come up with a new coalition agreement.

A spokesperson for the prime minister said the talks were "very positive", but that no agreement had yet been made.

Some reports are suggesting that Portas, who dramatically quit his post as foreign minister government two days ago, may return as deputy prime minister and economy minister, although this is unconfirmed.