Portugal: Passos Coelho named prime minister but left threatens to rebel

Portugal’s opposition Socialists pledged on Friday to topple the centre-right minority government with a no-confidence motion, saying the president had created “an unnecessary political crisis” by nominating Pedro Passos Coelho as prime minister.

In Spain, polls show the Socialists could form a majority in parliament if they join forces with new anti-austerity party Podemos, another close ally of Syriza, or the new centre-right party Ciudadanos.

“This would be the first time in Portugal’s democratic history that the party which won the elections does not govern”, Spanish Prime Minister Mariano Rajoy remarked Thursday at an EPP congress in Madrid.

But Portugal’s debt of around 130 percent of gross domestic product and its fragile economic recovery will provide plenty of headaches for any incoming government.

Socialist lawmaker Joao Soares said: “It is unusual that the president has named somebody as prime minister who can not guarantee a stable government”. Instead, PS leader António Costa reached out to the Portuguese Communist Party (PCP) and the radical Left Bloc (BE) to pull together a broad anti-austerity alliance that would command a majority in the Assembleia da República.

Citing the European People’s Party’s (EPP) involvement in the country’s elections, the left-leaning Portuguese newspaper Publico claimed Friday that the EPP is growing “nervous” about the country’s anti-establishment surge.

Cavaco Silva and Passos Coelho both belong to the Social Democratic Party, which, in spite of its name, is a right wing party in Portugal. Spending cuts and tax increases led to protests and caused the prime minister’s popularity to drop. “It’s my duty to do everything to prevent the transmission of wrong signals to financial institutions, investors and markets”.

Portugal is the first country to fail to meet the October 15 deadline for sending budgets to the European Commission since a set of new rules for harmonising cross-border economic governance were put in place in 2013. But Mr. Passos Coelho said he would move at a slower pace than Mr. Costa.

The coalition grouping Coelho’s party and smaller conservative party CDS would need the Socialists to at least abstain in parliament for legislation to pass. Since losing the 2011 election after requesting the bailout, the Socialists voted alongside the ruling coalition on policies including the European Stability Mechanism treaty.

Meanwhile, MPs will this Friday morning be taking their seats in Parliament for the 13th legislature since Portugal become a democracy 41 years ago, but several indicators suggest that the 14th legislative period is likely to be only a few months away. The Socialists have 86 members of parliament, while the Left Bloc and the Communists hold 19 and 17 seats, respectively.

Such an occasion will be presented to the opposition by no later than 4 November, the date on which the coalition will have to present their programme for the next four years of government, should they form a government.

The government says more savings must be made. There will, however, be a presidential election when Cavaco Silva steps down in January.

Silva, 76, served as prime minister from 1985 to 1995 and presided over the 1992 signing of the Maastricht Treaty, which cleared the way for the euro common currency. Today, Cavaco Silva angrily rejected the offer and re-appointed Passos-Coelho’s coalition as a minority government.