It is understood that Costa will uphold his country’s commitments to its creditors and Eurozone partners, while it is remains to be seen how the Left Bloc will square their participation in government with their commitment to “mass disobedience” against austerity.
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LISBON, Portugal (AP) – Portugal’s new government is facing what are likely to be its final hours in power as anti-austerity forces in Parliament prepare to force its resignation.
The Socialist Party united with the Communists, the Greens and radical Left Bloc to obtain a voting majority Tuesday to push out the Social Democratic Party (which is conservative despite its name).
Costa, as prime minister, will then have to speedily put together a 2016 budget to present to Brussels after Portugal missed last month’s deadline, having emerged from a debt crisis and exited a bailout programme only previous year.
After the collapse of the Passos Coelho government, Portugal’s president is expected to ask his Socialist opponent, Antonio Costa – who has vowed to “turn the page” on austerity – to form government.
Lawmakers started discussing the Coelho government’s program on Monday and resumed the debate at 10 a.m. on Tuesday with a vote due later in the day.
Portugal’s shortest-ever government is moving out of office, making way for an untested anti-austerity alliance that has yet to explain how it will increase spending without damaging the eurozone country’s public finances.
Under Portugal’s constitution, Portuguese President Anibal Cavaco Silva will now decide whether Costa will become prime minister or to seek an alternative candidate.
A loose alliance of Portuguese opposition parties is poised to vote Prime Minister Pedro Passos Coelho’s government out of power on Tuesday, threatening to prolong political instability on the euro area’s southwestern edge. Costa’s government plan includes a gradual increase in the minimum wage and a proposal to study changing income tax brackets.
His centre-right coalition won national elections on Oct 4, with just 39 per cent of the vote, after putting in place an austerity programme credited with arresting the country’s economic slide, restoring a few growth and access to financial markets and bringing down unemployment, which remains about 12 per cent.
“The Socialist Party is moving away from the political center”, Coelho said. Total combined public and private debt still remains at more than 370 percent of GDP, the highest in Europe. Minority governments in Portugal tend not to last their full term, and we do not rule out the possibility that Portugal may need to hold elections again within a year.
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For his part, Manfred Weber, the leader of the conservative European People’s Party’s group in the European Parliament, where Passos’ party belongs, warned of the dangers of a leftist government.
