The almost impossible happened, the three main oppositional, left-wing parties and their leaders, who don’t like each other and represent incompatible programs, decided to form a coalition government. They could have done so because, since the October 4 legislative election, they control 122 out of 230 seats in parliament.
However, the Portuguese President Aníbal Cavaco Silva decided to have his party colleague Pedro Passo Coelho form a minority government. The old and new coalition of PSD and CDS-PP called Portugal Ahead will have to win a vote of confidence in parliament within 10 days of the formation of the government. Since the three main parties of the political left have decided to bring the government down, it could become the shortest in the history of Portugal.
The Socialists, the Communists (former-Maoists) and the Syriza-style Left Bloc have decided to present a coalition program one day before the confidence vote. They still hope to form a government. Many within the two small far-left parties want to leave both the eurozone and NATO, some even want to leave the EU. All three left-leaning parties oppose the current government’s austerity and reform progam, which helped stabilize Portugal’s economy, but at a high social cost.
The Constitution only allows early elections 6 months after the last legislative election. Therefore, until June 2016, the president could let the current prime minister in place even after a lost vote of confidence, but only as head of a caretaker government. However, this would be smelly since there is a possible alternative coalition.
On the other hand, some within the Socialist Party are unhappy about the idea of forming a coalition government with the two smaller parties of the extremist-left. A radical, left-wing agenda would most likely seriously jeopardize the economic and financial situation of Portugal. Will some Socialists not vote against the center-right, minority government? Too many defectors would be needed. It seems unlikely that the current government will survive the confidence vote.
The situation gets further complicated by the fact that, in January 2016, a new president will have to be elected. It could become a kind of referendum on the path to adopt in the future: center-right minority or left-wing government.
Portugal has no time to lose and no margin for experiments. With a left-wing government, the interest rates on the Portuguese public debt cold skyrocket again.
Despite massive emigration, the unemployment rate still stands at roughly 12%. The public debt amounts to roughly 127% of GDP. The 2014 budget deficit reached 7.2% of GDP. In 2015, it may end up at around 3% of GDP, notably thanks to one of the few bright spots in the economic and financial picture: a growth rate of around 1.5% to 1.7% (the latter number is the Bank of Portugal prediction) in 2015.
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Article added on November 3, 2015 at 17:49 CET.
