Portugal in limbo after leftists topple government

AFP , Wednesday 11 Nov 2015

Portugal
Portugal's Prime Minister Pedro Passos Coelho (L) shakes hands with Socialist party (PS) leader Antonio Costa at the end of a debate on government programmes at the parliament in Lisbon, Portugal November 10, 2015 (Photo: Reuters)

Portugal was in limbo Wednesday as its leftwing opposition waited for the green light to take power, after toppling the 11-day-old conservative minority government in a dramatic parliamentary vote.

President Anibal Cavaco Silva is set to decide whether to charge Socialist leader Antonio Costa with forming a new government in the face of concerns over whether the fragile leftist alliance can last.

Cavaco Silva, a conservative, has never hidden his reluctance to giving the reins to leftwingers he regards as "anti-European" and "opposed to NATO", and may require further guarantees of stability from Costa.

The uncertainty has fuelled nervousness amongst investors in a country that is still emerging from an international bailout, though Costa has vowed that any Socialist-led government will meet its international commitments.

"The most probably scenario is that (Cavaco Silva) will name Antonio Costa as prime minister, but that decision will depend on the firmness of the agreement he's presented with," said political scientist Antonio Costa Pinto.

The president could also leave a conservative caretaker government in power ahead of fresh elections, which could similarly result in the removal from power of Prime Minister Pedro Passos Coelho, who was set to meet with Cavaco Silva on Wednesday afternoon.

The newly-formed alliance of the Socialist Party (PS), Communists, Greens and Left Bloc -- which is close to Greece's ruling Syriza -- is the first of its kind since the birth of a democratic Portugal, and had seemed unimaginable just weeks ago due to differences between the groups.

Together the three parties hold 122 seats out of 230 in parliament, a majority that allowed them to vote down Passos Coelho's government programme on Tuesday.

Passos Coelho's centre-right coalition won the most votes in last month's elections but lost the absolute majority it had enjoyed since 2011. His government, sworn in on October 30, is the shortest-lived since Portugal returned to democracy in 1974.

The leftists want to reverse some cutbacks and reforms demanded by creditors following Portugal's 78-billion-euro ($87-billion) bailout.

But the three agreements signed Tuesday between the leftists provide few details on how they would govern together.

They do not guarantee the approval of a budget, and there is no reference to Portugal's European commitments -- a potential sticking point between the europhile Socialists and more radical leftists who are traditionally critical of Brussels.

Any new elections could not take place until June at the earliest, as the current parliament cannot be dissolved for six months.

Portugal's main stock index was up 0.46 percent at around 1300 GMT, recovering some losses after a 4.05 percent fall on Monday over the political uncertainty.

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