Portugal’s govt unveils its plans but it’s likely doomed

The Communists have said they want Portugal to leave the eurozone.

The party (PS), which last week formed an unprecedented alliance with the far left and appeared set to take over the government, will along with other lawmakers vote on the issue on Tuesday.

German Finance Minister Wolfgang Schäuble expressed confidence that Portugal would continue on the “path of success” followed over the past four years, when Passos Coelho’s center-right government managed to exit from a €78 billion 2011 bailout program.

Passos Coelho’s fledgling government is hanging on by a thread, with the left-wing bloc, which counts 122 seats out of 230 in parliament, poised to replace it.

The “triple left” alliance includes the Socialist Party, the Left Bloc, and the Communist Party.

Portuguese bonds and stocks were hit on Monday as a coalition of left-of-centre anti-austerity parties looked set to form the country’s next government.

The premier will fall if the Socialists and their allies join forces to reject the government’s policy program.

Catarina Martins, the leader of the Left Bloc said: “Mr. Prime Minister, today we have indeed a very odd debate, because we are debating a government programme that ends before it starts”.

“I will not collaborate and will oppose any negative policy leading to Portugal’s ruin, where the Portuguese are seen as mere instruments of political power games”, he said as he presented his government program in parliament.

The statement from Costa and the PS assures that “the conditions for a stable, responsible, coherent and durable government have been secured” by the parties, but that there would need to be “joint appraisal” of budgetary measures.

However, the far-left partners have so far promised only parliamentary support without entering the government.

The Socialists insist concessions to the hard left won’t compromise Portugal’s commitments to eurozone deficit- and debt-reduction targets.

“Faced with the radicalism of the current [centre-right] government and the brutal measures the country has suffered, there now exists the possibility of rolling back austerity without calling our worldwide obligations into question”. President Anibal Cavaco Silva, who has the power to name prime ministers, would then face a choice: ask Costa to form a government, let Coelho stay on as caretaker or try to find another premier.

Passos Coelho’s second government will be shortest since the country returned to democracy in 1974.

To put that in perspective, Syriza, the radical coalition that won Greece’s election and orchestrated a six-month standoff with Europe’s governing institution, comes only 22nd.