Saturday 1 October 2016

Portuguese minority government takes office ahead of predicted collapse

Published 30/10/2015 | 13:21

Portuguese prime minister Pedro Passos Coelho delivers his speech during the swearing in of the new government. (AP)
Portuguese prime minister Pedro Passos Coelho delivers his speech during the swearing in of the new government. (AP)
Eduardo Ferro Rodrigues, right, is congratulated by Antonio Costa after being elected president. (AP)

Portugal's centre-right coalition government has taken office, starting the countdown to its likely collapse in 11 days.

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The government of the past four years won a general election on October 4 with 38% of the vote, but centre-left parties that fiercely oppose its austerity policies together collected 62%.

They are vowing to use their majority in parliament to force the government's resignation in a vote scheduled for November 10, and then take power themselves.

That would make the current government the country's briefest ever, bringing concerns about whether Portugal will remain committed to the fiscal discipline required of eurozone countries.

Debt-heavy Portugal is still recovering from its 78 billion euro (£56 billion) bailout in 2011, when it was engulfed by the eurozone financial crisis.

The budget deficit last year was the second-highest in the eurozone at 7.2%, and government debt remains at 128% of gross domestic product - the third-highest in the European Union.

The leftist alliance is negotiating an agreement that would reconcile differences between the moderate Socialist Party and the more radical Communist Party and Left Bloc. Crucially, the Socialists are in favour of the euro currency for Portugal whereas its two potential partners have campaigned against it and have also opposed Nato membership.

At the formal swearing-in ceremony at Lisbon's Ajuda Palace, president Anibal Cavaco Silva warned opposition parties against any policies or conduct that might raise doubts about Portugal's international commitments.

A decision on whether the leftist alliance will potentially replace the government falls to the head of state, who could also install a caretaker government until new elections.

Press Association

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