The government of Portuguese Prime Minister Pedro Passos Coelho is on its way out – just six weeks after re-election – after losing a no-confidence vote on Tuesday, according to parliament sources.
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Days after the centre-right administration was sworn in for a second term, with plans for four more years of economic reforms and cutbacks, several left-wing parties in Portugal’s parliament forged an unprecedented alliance to reject the government’s proposals.
Prime Minister Pedro Passos Coelho, whose centre-right coalition won the most votes in last month’s elections but lost the absolute majority it had enjoyed since 2011, warned Monday that the rival bloc’s policies would “ruin Portugal”.
If the leftists succeed, the vote would force the government to resign after just 11 days in power – which would make Passos Coelho’s administration the shortest in Portugal’s history.
The outgoing government got most votes in an October general election when it promised more years of frugality following the debt-heavy country’s 78 billion-euro ($84 billion) bailout in 2011.
Constitutionally, Silva can either allow the leftists to rule or keep Passos in a caretaker role until new elections could be called after June 2016. The outcry raised when the shortlived Coelho government tumbled on Tuesday may have been a sample of the shape of things to come.
The formation of a Socialist-led government depends on President Anibal Cavaco Silva.
Socialist leader Antonio Costa is expected to become prime minister in coming weeks, supported by the Communists and Left Bloc.
The Socialists insist concessions to the hard left won’t compromise Portugal’s commitments to eurozone deficit- and debt-reduction targets.
However, Portugal exited the bailout scheme in May 2014 due to harsh austerity measures and increased taxes, returning to growth after three years of recession. Eurozone leaders had pointed to Portugal, and Ireland, as examples of how austerity paid off as their economies improved.
Portuguese media said on Wednesday that the fragility of the separate agreements signed by the BA (19 seats), the PCP and the Greens (17 seats, standing alongside the CDU coalition at the elections) with Costa’s PS (86).
“We will stay on the path of fiscal consolidation”, Mário Centeno, a PS member of parliament and a former Bank of Portugal economist, told the Financial Times in an interview.
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The divisions inside parliament were reflected in the streets outside, where about 5,000 left-wingers rallying in favour of a new Socialist-led government faced off with about 2,000 supporters of the conservative government.
