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Portuguese MPs force minority government to quit over austerity Portuguese MPs force minority government to quit over austerity
(35 minutes later)
Portuguese MPs have forced a minority centre-right government to resign after rejecting its austerity policies less than two weeks after it was sworn in. A surprise alliance of leftwing parties with a mission to “turn the page” on austerity has ousted Portugal’s centre-right government barely 11 days after it took power.
The coalition of the prime minister, Pedro Passos Coelho, had emerged as the largest party in a general election on 4 October but lost its outright majority in a public backlash against austerity measures adopted following a €78bn bailout in 2011. The moderate centre-left Socialist party forged an unprecedented alliance with the smaller Communist party and the radical Left Bloc, linked to Greece’s anti-austerity Syriza party, and used a parliamentary vote on policy to force the government to resign on Tuesday.
The vote to bring it down follows the moderate Socialist party forming an unprecedented alliance with the Communists and their Left Bloc allies, giving the grouping 122 seats out of 230 in Portugal’s parliament. The Socialist leader, António Costa, is now expected to become prime minister in the coming weeks with a broad, leftwing coalition government, which hopes to ease austerity while still adhering to European Union rules.
Socialist leader Antonio Costa is now expected to become prime minister in coming weeks. “The taboo has ended, the wall has been broken,” he said after the vote. “This is a new political framework, the old majority cannot pretend to be what it stopped being.” “The taboo has ended, the wall has been broken,” he said after the vote. “This is a new political framework, the old majority cannot pretend to be what it stopped being.”
The agreement between the three parties to take down Passos Coelho’s government comes despite deep ideological differences between them. The toppled government of the centre-right prime minister, Pedro Passos Coelho, had come first in last month’s election but had lost its absolute majority as voters questioned the harsh and unpopular austerity he had imposed in return for a €78bn international bailout in 2011, during his first term.
Outgoing prime minister, Passos Coelho had warned ahead of the vote that the Socialist-led bloc’s policies would “ruin Portugal”. He lost the vote 123-107 after an MP from an animal rights party joined the leftwing parties. Passos Coelho, who had cut salaries and pensions, slashed public services, and introduced the largest tax hikes in living memory, had argued he was the only one who could be trusted to lead Portugal through its economic recovery and he had planned to continue leading the country with a minority government.
His second government is the shortest since Portugal returned to democracy in 1974. But the unlikely alliance of opposition parties on the left joined together to topple the government in less than two weeks. It became the shortest administration since Portugal became a democracy in 1974, after 48 years of dictatorship.
The finance minister, Maria Luis Albuquerque, warned failure to cut the budget deficit in line with Lisbon’s EU commitments could provoke a new debt crisis and need for another bailout. “We don’t need to imagine the consequences, it’s enough to look at the recent experience of Greece and the cost of their attempt to end austerity ... More recession, more poverty, more joblessness and more dependence on European and IMF lenders.” The showdown came as Portugal – despite the beginnings of an economic recovery after exiting the bailout scheme – remains heavily in debt and vulnerable. Unemployment is still painfully high at 12%, rising to 30% among young people. Living standards have fallen sharply in what is still western Europe’s poorest nation. One in five people continues to live below the poverty line with an income of less than €5,000 (£3,684) per year. Health and education services have been affected by cuts.
The new alliance, which would have been unthinkable only a few weeks ago because of party differences, is made up of several strands of the left. At the helm is Costa, a popular former mayor of Lisbon and head of the centre-left Socialist party. The Socialists are a moderate mainstream party with a long history in government and though Costa has pledged to ease back on austerity and boost households’ disposable income, he is nonetheless a moderate who is keen to abide by Europe’s budget deficit rules.
He had long been at pains to reassure investors and Portugal’s eurozone partners that a Socialist-led government would not result in a Greece-style clash with creditors and that he would respect Portugal’s international commitments.
He told reporters as he left parliament after the vote: “We’re in a position to assure the scrupulous fulfilment of our international obligations, but while allowing family income to recover, and the economy and employment to grow.” He said the deal he made with the two smaller, more radical-left parties who have never been in government was “serious”. As centre-right politicians warned of a fragile alliance, Costa told parliament he could guarantee a “stable” government.
Unlike in Greece, where the far-left Syriza party leads the government, Portugal’s Communists and the Syriza-allied Left Bloc would play a supporting role to the traditionally mainstream Socialist party.
The Left Bloc – led by Catarina Martins, 42, a charismatic actor-turned-activist – was established in 1999 and made a surprise breakthrough in the elections, winning just over 10% of votes and making it the country’s third-biggest political grouping. The party has recommended mass disobedience against austerity and, like the Communists, wants Portugal out of NATO.
Portugal’s long-established Communist party has a traditional Marxist-Leninist stance and took its usual 8% of the vote in the recent elections. It has campaigned to nationalize the country’s banks and energy companies. It is led by Jerónimo de Sousa, a 68-year-old political veteran who started work in a factory aged 14. De Sousa told parliament: “Millions of Portuguese people will breathe a sigh of relief at the end of a [centre-right] government which for four years has made their lives hell.”
To achieve their unprecedented alliance with the Socialists and gain a door to power, the smaller parties will likely surrender their more hardline positions. A policy agreement for the next four years negotiated between the three parties is not yet public, but the Socialists insist on abiding by eurozone financial rules. The new coalition’s plans are believed to include giving back government workers pay that was cut and restoring four public holidays that were scrapped to boost productivity.
The politicians argued that various left-of-centre parties had together collected 62% of the vote in last month’s election.
In 2011, Portugal became the third eurozone country after Ireland and Greece to be bailed out. Four years later, it has left the bailout scheme but only after implementing stringent austerity measures in return for funding. There have been steep tax increases, deep cuts in welfare rights, pay and pensions, as well as changes to labour entitlements. After three years of recession, the economy has grown this year. But unemployment, job precarity and poverty still hit hard.
Emigration had also been a major campaign issue. A total of 485,000 people left Portugal between 2011 and 2014, the highest emigration rate in over 50 years in a country whose total population stands at around 10 million. The recent exodus has surpassed the wave of Portuguese emigration in the 1960s that saw an unskilled labour force leave. This time, there has been a mass exodus of qualified youth, including scientists, doctors and nurses.