Portugal’s leftist opposition topples government

Left wing parties ousted Portugal’s ruling center-right coalition on Tuesday (10 November), only 10 days after it came into power, paving the way for a Socialist-led government that could end years of austerity under the EU's bailout programme.

In the first such move against an elected government since the birth of a democratic Portugal in 1974, an unprecedented coalition between the Socialist Party (PS) and the Communist Party, joined by the newcomer Left Bloc, toppled the government of prime minister Pedro Passos Coelho after it presented its program.

The plan was voted down by the new leftist bloc with 123 votes to 107 against in the 122-seat parliament, prompting the resignation of the government.

The center-right coalition won the most votes in October's election but lost its overall majority in parliament.

Now it is up to president Anibal Cavaco Silva to decide to ask the Socialists to form a new government, or allow incumbent Passos to stay in charge until new elections are held.

"The taboo has ended, the wall has been broken," Socialist leader Antonio Costa was quoted as saying by Reuters on Tuesday.

"This is a new political framework, the old majority cannot pretend to be what it stopped being," he added.

The Socialist Party promised to alleviate austerity for Portugal, reversing a series of unpopular measures adopted following a €78 billion bailout in 2011.

The anti-euro, anti-Nato communists and Syriza-like Left Bloc will play a supporting role to the moderate Socialists in the fragile set up, but are said to have pledged not to drive Portugal out of the euro.

The leftist alliance wants to reverse cuts in pay, pensions, and public services, as well as to roll back tax increases.

Passos’ minority government warned that backtracking on austerity could put Portugal on a similar path to Greece.

But outside the parliament building on Tuesday, anti-austerity demonstrators shouted “Victory!” as news of the vote spread, while pro-government protestors sang the national anthem.

For his part, Manfred Weber, the leader of the conservative European People’s Party’s group in the European Parliament, where Passos’ party belongs, warned of the dangers of a leftist government.

“Future of people and Portugal's stability are at stake. Left-wing parties act against will of voters and winner of elections,” he wrote on his Twitter account.

A lengthy process to form a new government could deepen the political crisis.

Portugal already missed last month's deadline to present its 2016 budget guidelines to Brussels.

Investors also seemed nervous, as Lisbon's stock exchange fell on Tuesday and Monday.

Yields on 10-year bonds rose 15 basis points also rose to 2.84 per cent, compared to 2.29 per cent before the elections.