Socialist Prime Minister Antonio Costa, who ruled Portugal for six years in alliance with two far-left parties, the Left Bloc and the Portuguese Communist Party, may lose support this Wednesday (27) in a vote on the 2022 budget bill. The deputies of the two union abbreviations decided to vote against the proposal, as did the opposition parties. If the budget is rejected by the Assembly of the Republic, Portugal could face early legislative elections.

Socialist Prime Minister Antonio Costa, who ruled Portugal for six years in alliance with two far-left parties, the Left Bloc and the Portuguese Communist Party, may lose support this Wednesday (27) in a vote on the 2022 budget bill. MPs against two union cuts decided to vote against the proposal, as did the opposition parties. If the budget is rejected by the Assembly of the Republic, Portugal could face early legislative elections.

Portuguese President Marcelo Rebelo de Sousa was crucial to get the MPs to seek a compromise. “My position is very simple: either there is a budget, or there will be a dissolution,” insisted on Monday Rebelo de Sousa (25). According to the center-right president, the 2022 budget is an important tool to stimulate Portugal’s economy as it relies on funds provided by the European Union recovery plan to tackle the Covid-19 crisis.

In Portugal, the head of state does not have executive power, but has one of the constitutional prerogatives. Most important for the president is the possibility of dissolving parliament and calling early legislative elections in the face of a serious political crisis.

“We will do everything to come to an agreement, but we will not do it at any cost,” responded Prime Minister Antonio Costa on Tuesday (26). The socialist rejected the idea of ​​leaving office and said that he would seek re-election with his party if a new vote was inevitable.

This Wednesday (27) morning, Portuguese Finance Minister João Leau said that the country “does not want and should not return to where it was not happy.” To the minister, the government presented “proposals that will allow significant progress to be made in addressing the structural challenges facing Portuguese society,” such as demographics, tackling inequalities or responding to climate change. “All this without withdrawal, without reduction, without deviating from everything that has been guaranteed and achieved since 2016,” said the financial holder.

Dispute on the restoration of labor rights

But discussions over the 2022 budget have met with the will of the radical left to overturn labor code provisions inherited from the troika of creditors formed by the European Union, the European Central Bank and the International Monetary Fund. In exchange for an international bailout plan provided to Portugal in 2011 following the 2007-2008 financial crisis, the center-right government at the time adopted austerity measures that affected wages, pensions and labor rights.

In 2015, when he came to power, the socialist Antonio Costa forged an unprecedented alliance with the Left Bloc and the Communist Party, which supported him in his first presidential term, without entering the government or forming a formal coalition like the one that rules neighboring Spain. At this point, the Portuguese left banded together to turn the page of the austerity policy pursued by the right in exchange for an international bailout plan. Currently, this fragile left-wing alliance, known by the Portuguese as a “ruse”, began to crumble after the fall 2019 elections.

Winning the election, but lacking eight seats to win an absolute majority in parliament, Costa refused to negotiate new agreements that would guarantee stability until the legislative elections scheduled for late 2023, preferring to negotiate the necessary parliamentary support for the case: individually.

A year ago, the budget for 2021 was adopted in a narrow range thanks to the abstinence of a coalition of Greens and Communists and a small party of animalists.

worst possible scenario

The risk of a budget stalemate materialized this time when the Communist Party, following in the footsteps of the left-wing bloc, announced on Monday its intention to vote against the government project, accusing it of not doing enough to increase the purchasing power of the Portuguese or to secure funding for public services.

Former allies blame each other for the failure of the negotiations, pointing to the intransigence of the opposing camp in calculating pensions or raising the minimum wage. However, the scenario of early legislative elections does not favor any of the forces present, save the far-right, who hope to reaffirm the progress made in the presidential elections last January.

To distance themselves from socialist power, left-wing radicals risk projecting Portugal into the worst-case scenario, in which the prime minister and president have to deal with a political crisis while the health crisis has lost its intensity but is not over.

At the other end of the political spectrum, on the right, the two conservative parties have also been caught off guard by the possibility of new elections soon. Amid internal squabbles, they will have to set a record between late November and early December.

(According to RFI and AFP)