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30/09/2016

Green light for left-wing government in Portugal

Elections

Green light for left-wing government in Portugal

A Portuguese Communist Party election poster in the capital, Lisbon.

[MattTempest/Flickr]

The Portuguese Communist Party has agreed to form a governing coalition with the Socialist Party. The fate of Portugal’s minority government will be decided in a vote of no confidence on Tuesday (10 November). Our partner La Tribune reports.

Pedro Passos Coelho’s time as prime minister of Portugal is coming to an end. After gaining the support of the Left Bloc (BE) last Tuesday (3 November), the Portuguese Socialist party (SP) has now been joined by the Portuguese Communist Party (PCP) in an attempt to form a left-wing government. The PCP delivered a document entitled “A common position for a shared SP-PCP government” to the Socialist party.

The details of this plan are not yet public, but the Communists have said that the aim of the text is “to form of a government, to present a programme, to take office and to adopt policies that will ensure sustainable solutions”.

BE already on-board

The Portuguese Communist Party forms the backbone of the Unitary Democratic Coalition (UDC), which won 8.3% of the vote in the 4 October general election, returning 17 members of parliament. The other member of this coalition, the Green party, had already agreed in principle to form a left wing government.

Last Tuesday (3 November) the SP also concluded talks with the BE, which had won 10.2% of the vote and 19 seats in the October elections. According to Catarina Martins, the Left Bloc’s spokesperson, the parties hope to provide “left wing answers to questions of employment, pay and pensions” with this more formal agreement.

“The draft agreement is ready, I will present it to the SP,” said Antonio Costa, the leader of the SP and, most likely, the next prime minister of Portugal.

Minority government with presidential support

The political manoeuvre by the Portuguese President, Anibal Cavaco Silva, looks on the point of failure. Just two weeks ago he refused to accept assurances from the leader of the SP, Antonio Costa, and the leaders of the PCP and BE, that the left was in a position to form a stable government.

On the pretext that he did not want to endorse a government resting on “Eurosceptic” forces, he instead named Pedro Passos Coelho as prime minister and asked him to form a government.

But the right wing was only able to form a minority government. With 38.3% of the vote and 107 of the 230 seats in the Portuguese parliament, the two parties in Portugal’s governing coalition were supported by less than half of MPs.

The president’s calculation

Under the Portuguese constitution it is possible for a minority government named by the president to hold office, as long as it is not overthrown by an absolute majority of MPs. If no viable alternative coalition exists, the minority government can stay in power.

Portugal’s Conservative President Anibal Cavaco Silva had hoped that the Socialist party’s right wing would refuse to form a coalition with the radical left to overthrow Passos Coelho’s government, as it would jeopardise the country’s “European engagement”.

But he underestimated the scale of the country’s discontent with the austerity policies implemented by the Portuguese right since 2011. The prime minister pulled out his last ace on Thursday (5 November), presenting a plan that accommodated several points from the Socialists’ own political programme.

The strategic game of Antonio Costa and the SP

But even this did not bring the desired results. For the SP, which rejects the austerity imposed by the Portuguese right since 2011, this was not enough.

Antonio Costa continued his discussions with the radical left. He ensured his future allies would respect the European budgetary framework, to reassure the more moderate members of his own camp. And he even threatened not to vote against the government in Tuesday’s vote of no confidence if an agreement with the BE and the PCP was not guaranteed.

This final argument was decisive for the Communists, who had been dragging out the negotiation process in recent days. In joining this left wing alliance, the PCP, traditionally a hard line opponent of the euro, has made a significant change of strategy.

Will the government fall?

Of course the Socialist party will still have to give the green light to the PCP’s proposals if the left wing coalition is to become the next government of Portugal. If the SP accepts these conditions, Pedro Passos Coelho’s government will not survive the vote of no confidence: the left wing coalition would control 121 of the 230 seats in parliament.

The ousted prime minister would have to resign and Anibal Cavaco Silva would then have no choice but to ask President Antonio Costa to form a majority government.

First test: the budget

This change government, which will surprise many observers who prematurely hailed a “victory” for the right on 4 October, will have to be built up over time. In the short term, it will also have to deal with the European Commission.

Brussels did not receive the Portuguese budget for 2016 before the deadline set out in the European semester. An objection was delivered to Lisbon, and the new government will now have to put together a budget different from that presented by Pedro Passos Coelho.

With Brussels demanding €600 million of savings, this will be the new prime minister’s first big challenge. Keen not to be perceived as “lax” by German Finance Minister Wolfgang Schäuble, who would like to remove budgetary oversight from the European executive in the future architecture of the eurozone, Brussels is not likely to start giving concessions now.