Portugal: Portugal’s outgoing PM Coelho asked to form minority government

Portugal’s president invited the center-right coalition government of the completed four years to return to power Thursday next it won a general election, even though it will be outnumbered in Parliament by opponents who vow to force it out within days.

The coalition won the Oct. 4 ballot with 38.4 % of votes and will policy as a minority government, with Pedro Passos Coelho expected to continue as prime minister.

But an unprecedented alliance of left-of-center parties, led by the moderate Socialists and inclunding the Communist Party and radical Left Bloc, has 122 seats in the 230-seat Parliament. The alliance says it will use that majority to quickly bring down the government and take power itself.

The political environment in Portugal has introduced a note of uncertainty into the 19-country eurozone that could rattle investors only recently settled next Greece’s radical Syriza rang alarm bells. The issue is whether governments in the bloc are in a position to enact deficit-reduction policies analysts say are needed to replace their financial health.

Deficit-heavy Portugal needed a 78 billion-euro ($86.7 billion) bailout in 2011 amid the eurozone’s financial crisis. Its economy is improving but remains fragile.

The chief of national, who is usually a symbolic figure, faced two alternatives: bring back the government despite its disadvantage in Parliament, or opt for an unprecedented alliance of leftist parties which have from presently on to provide details of their commitments to each other.

President Anibal Cavaco Silva said in a televised address to the country that he could not give power to a government that opposed Portugal’s membership of international institutions such as the European Union and the 19-country eurozone. Both the Communist Party and the Left Bloc campaigned against the policies of those institutions, though the Socialist Party has said it would abide by eurozone financial rules.

“Out of the EU and the eurozone, Portugal’s next would be catastrophic,” Cavaco Silva said.

The Social Democratic Party and Popular Party coalition, which over the completed four years enacted unpopular austerity measures, have 10 days to form a government.

Next that, they need Parliament’s approval for their four-year policy program - which the center-left parties said they won’t grant.