Portugal's ousted PM says Socialist government proposal unstable

Reuters News
Posted: Nov 20, 2015 5:31 AM

By Andrei Khalip

LISBON (Reuters) - Portugal's caretaker premier told the president on Friday that the Socialists, who ousted him last week, must come up with a more viable proposal than a minority government with unreliable parliamentary support from the far left.

President Anibal Cavaco Silva is deliberating on what to do next in the political crisis. He must decide whether to nominate a new government led by the opposition Socialists or leave Pedro Passos Coelho's center-right in power in a caretaker capacity until new legislative elections next year.

Passos Coelho branded the Communists and Left Bloc "radical and anti-European" and said their pacts for parliamentary support with the Socialists do not guarantee that European budget rules will be honored, which could undermine Portugal's recovery after a debt crisis and an international bailout.

The Socialists have promised to keep cutting Portugal's budget deficits and debt in line with Lisbon's EU commitments and reiterated their position on Friday, saying that their leftist partners are fully aware of their strategy.

But, echoing concerns of some analysts who point out that those parties provided no such written guarantees, Passos Coelho said a Socialist government would be too weak and unstable.

"I told the president that it is now up to the Socialist Party, which toppled the government, to present a government solution... But the Socialist Party has no guarantees that its next budget will be approved by these political forces, nor that Portugal will continue to honor the European rules."

Analysts say the president could set conditions to the Socialists, possibly demanding a common document with all leftist parties stating that they will honor Portugal's commitments to cutting budget deficits, or a coalition government where the far left commits itself to its program.

Socialist leader Antonio Costa said after meeting Cavaco Silva that Portugal needs a swift political solution so that it has a government able to respect Lisbon's international commitments. He said he was "fully confident that we will see a 2016 budget approved" with support from the far left.

Cavaco Silva started consultations last week to make his decision, meeting business associations, trade unions, economists and now political leaders.

He has given no indication of when he will announce his decision, prompting accusations by the Communists and Left Bloc that he is dragging his feet in nominating a Costa-led government. The stalemate is the result of an Oct. 4 election when the center-right won the most votes but lost its majority.

The different sides are staking out hard positions and many are calling this Portugal's most critical political moment since the Carnation Revolution of 1974, when a dictatorship was overthrown by young army officers and democracy ushered in.

(Additional reporting by Sergio Goncalves)