Onzekere situatie in Portugal na aftreden premier Sócrates (en)
EUOBSERVER i / BRUSSELS - Portuguese Prime Minister José Sócrates i has offered his resignation after opposition parties unanimously rejected the government's latest package of austerity measures.
Wednesday's (23 March) vote means early elections are now likely to be held in the southern EU member state, with the additional uncertainty also increasing the chances of Portugal needing an international bail-out.
Socrates, from the centre-left Socialist Party, said Portugal would suffer "deeply negative consequences" if it had to call on financial support, accusing the opposition's rejection as "mere hunger for power".
A grand coalition between the Socialists and centre-right Social Democrats is still a faint possibility, with Portuguese President Anibal Cavaco Silva set to meet party leaders on Friday to assess the possible options.
Socrates will now attend a summit of European leaders in Brussels on Thursday as a caretaker prime minister, lacking the political authority to negotiate a deficit-reduction plan as originally intended.
A political vacuum in Lisbon would also complicate negotiations for an international aid package, should it be needed, with Portugal's electoral law stipulating that 55 days must pass between the dissolution of parliament and the holding of fresh elections.
Portugal's Socialist government has desperately sought to avoid calling on EU and IMF i financial support like Greece and Ireland, implementing three austerity packages of spending cuts and tax hikes in a bid to reassure markets that the country can overcome its mountain of debt.
The moves have proved deeply unpopular with Portuguese citizens however, prompting a series of strikes and protests over the past year.
A fourth austerity package in 11 months, rejected by all opposition parties on Wednesday, has also angered trade unions, with train engineers walking off the job during the morning commute, causing widespread travel disruption ahead of the vote.
Opposition parties argued the government's latest plan goes too far, hurting weaker sections of society, especially pensioners who will pay more tax. Some analysts have suggested however that a ruling centre-right Social Democrat government would be unlikely to make substantial changes.
Prior to the vote, Social Democratic lawmaker Luis Montenegro said his party had "the patriotic duty ... to stop the Socialist government going down the wrong, dead-end path."
EU leaders had hoped to reach a 'grand bargain' at Thursday's European Summit, in order to bring an end to financial market doubts over government finances and the stability of the eurozone.
Portugal's leadership vacuum and political wrangling in Finland and Germany this week have cast doubts over the self-imposed deadline, however.