Portugal PM says could be in opposition from next week

The coalition led by Portuguese Social Democratic Party (PSD) leader and Prime Minister Pedro Passos Coelho and CDS-PP leader Paulo Portas won most votes in the October 4 election and gained 107 seats in the 230-seat parliament, but lost an outright majority.

The party said in a statement that it reached a joint position with the Socialists after a meeting on Wednesday, allowing the Socialists to form a lasting government.

The Left Bloc, founded in 1999, said it agreed to back the Socialists to “defend jobs, pay and pensions”, after years of austerity.

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

“We’re still working on ensuring that there is stability during the government’s term in office”, Costa said.

Costa’s government plan includes a gradual increase in the minimum wage and a proposal to study changing income tax brackets.

In the Spring economic forecasts the Commission expected the Portuguese budget deficit for this year to be 3.1 percent, which kept Portugal in the Excessive Deficit Procedure.

But the president could soon have little choice but to ask the Socialist leader to take over. The Socialist Party made no immediate comment.

Lawmakers will start discussing the Coelho government’s program on Monday.

Portugal’s president Anibal Cavaco Silva had vowed not to appoint a leftist coalition government, saying that the anti-austerity and anti-EU policies they could introduce would be unsafe for the economy.

The PCP also reassured its intentions of submitting a motion to reject the current government, which will be voted on Tuesday in parliament.

Parliament can’t be dissolved less than six months after it’s elected, according to the constitution.

While Passos Coelho has indicated that he was ready to talk to other parties to pursue the “necessary reforms” he wants to implement, the left-wing Socialists, Communists and the Left Bloc between them have 122 seats, enough for a parliamentary majority. The Socialists have 86 members of parliament, while the Left Bloc and Communists hold 19 and 15 seats, respectively.