The head of state, who has no executive power but oversees the government, then consults the political parties in coming days before deciding whether to invite Costa to form a government. And, working together, the parties rejected Passos-Coelho’s plan, meaning the prime minister will have to resign.
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If the leftist alliance forms a new government, it would be the first ruling coalition to include the Communists and the Left Bloc in the modern political history of Portugal.
The center-right coalition of Prime Minister Pedro Passos Coelho won an October 4 general election, despite its unpopular austerity budgeting, but lost the outright majority it had enjoyed since 2011.
The leftist alliance wants to reverse cuts in pay, pensions, and public services, as well as to roll back tax increases.
It said the centre-right government pursued policies that worked against the interests of workers, the poorest as well as the middle class, and its latest programme showed it was determined to continue those policies.
His second government is the shortest since Portugal returned to democracy in 1974.
‘Portugal today is incomparably better than it was four years ago, ‘ outgoing Finance Minister Maria Luis Albuquerque told Parliament during the debate.
Those parties have been fierce opponents of the Socialists and the conservatives during the four decades they have alternated in power. The President must decide whether to name Costa a Prime Minister or ask Coelho to stay on as a caretaker until a new President, elected in January, can call new legislative elections in April.
“Future of people and Portugal’s stability are at stake”.
Even before taking into account the change in government, the Organization for Economic Cooperation and Development (OECD) warned that the fragile economic recovery risks slowing next year unless the pace of reform is picked up to cut debt, boost competitiveness and encourage investment.
Isabel Norton de Matos, a 59-year-old interpreter, said she hoped that “with Antonio Costa, Portugal does not become a new Greece”.
The prospect of a PS government assured of majority support from the radical BE and hardline PCP battered shares in Portuguese banks this week and saw government borrowing costs hit a five-month high.
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“Also the Socialists have separate agreements with each far left party, which will certainly create problems when they have to make (policy) adjustments”.
