Portugal's Socialist coalition talks running out of time

Reuters News
Posted: Nov 03, 2015 12:50 PM

LISBON (Reuters) - Portugal's opposition Socialists said on Tuesday they were still trying a reach an agreement with two other left-wing parties for a majority-backed government, which they have pledged to have in place before trying to oust the new cabinet next week.

The talks that began soon after an election on Oct. 4 have raised fears over the prospects for Portugal's timid economic recovery, because the potential partners reject some reforms imposed to escape a debt crisis.

The center-right coalition, whose minority government was sworn in last week, won the most votes in the election but lost its majority in parliament, which swung to the left.

Parliament will debate the program on Monday before a vote on Tuesday or Wednesday, which could bring down the new government if it is rejected. The Socialist have said they would not vote it down without a viable left-wing grouping in place.

Diario Economico business newspaper said on Tuesday the Socialists had finished the negotiations with the Left Bloc and was now focused on the Communists. But Carlos Cesar, head of the Socialists in parliament, said there was still no deal and time was running out.

"It is important that this agreement is fleshed out before the government program debate in parliament because our commitment is that we'll only contribute to ousting the government if we simultaneously bring a responsible alternative, a durable solution that gives Portuguese calm and confidence," he said.

"If there is no deal ... we will not leave the country without a government," he told reporters. "The Socialist party will not reject a government without having a sustainable, stable and durable alternative."

If the government is rejected by parliament, President Anibal Cavaco Silva would have to name Socialist leader Antonio Costa as prime minister or leave Pedro Passos Coelho in a caretaker capacity until after a presidential election in January. The president cannot call new parliamentary elections in his last six months in office.

The center-left Socialists have argued that they can form a government backed by a leftist majority that would respect European budget rules.

But the two left-wing parties they are talking to, especially the Communists, reject Brussels-imposed budget limits and have various other significant ideological divergences making a binding deal between them hard to achieve. Some Socialists also favor a centrist coalition rather than a deal with the radical left.

(Reporting by Andrei Khalip and Sergio Goncalves; Editing by Axel Bugge and Alison Williams)