October 13, 2015


Towards an anti-austerity government in Portugal

Antonio Costa, the leader of Portugal's Socialist Party, has all cards in his hands now. He received the minimum requirements for a government coalition from the Communists and the Left bloc. He also received an offer from the conservative-centre coalition. But he does not blink and reveal his intentions yet. Costa will hold another round of meetings with both left-wing and conservative parties this week to reach a consolidated position by the end of the week. He said they had a “very franc” dialogue with the Communists last week and a “very interesting” one with the Left bloc yesterday. Asked by Jornal de Negocios whether the president would give his blessing to a left-wing government, Costa avoided a direct answer, saying that Socialists informed Cavaco Silva about the steps to form a stable government that offers a political expression of the people’s wish to reverse austerity policies in compliance with Portugal’s international commitments. This is another way of saying "we are open to negotiations towards both sides". 

The prospect of an anti-austerity government in Portugal seems to relegate the leftist parties' other red lines to the background. The Left bloc leader Catarina Martins said after her meeting with Costa yesterday that for her party the government of Passos Coelho and Paolo Portas ended because there is now an alternative government solution. While we have no details of what has been agreed in their meeting, Martins said that the Socialist programme meets their conditions for “employment, wages and pensions.” The Left Bloc is, however, not interested in entering into a government coalition, according to Jornal de Negocios. Asked about her meeting with the president on Monday she said that the Left can respond to the request for a stable government, provided that it breaks with the cycle of right-wing politics. To the question whether the Left Bloc would be ready to drop their call for debt restructuring, Martins responded saying that the party knows the relative weight of the various ‘programmes’. Martins said they have not talked yet about the budget. 

Manuel Barroso, meanwhile, comments in Diario Economico that socialist voters did not vote for PS to form a government with PCP and BE. The majority of voters did not vote for parties that do not accept Portugal’s international commitments to the European Union or the Fiscal Compact.



Our other stories

We also have stories on the Commission's critical views of the Spanish budget, on the Greek omnibus reform bill, on Greek banks' capital requirements, on how Europeans are undermining efforts to force banks to shore up the total loss absorbing capital; on how rating agencies are hitting VW, on the German coalition of xenophobes and Islamo-phobes; on how the Labour Party is moving further away from the consensus of Socialist parties on the continent, and on how people are forming inflation expectations.

Eurointelligence Professional Edition

For premium access, please log in or register 
for a free 3 day trial access to the Eurointelligence Professional edition. The best independent intelligence on the eurozone in a fast and easy to read format.

A message from Wolfgang Münchau

Welcome to the eurointelligence.com homepage.

Since 2006 we have been providing our readers from central banks, European and international institutions and the financial sector with our daily morning newsbriefing, each morning, at 9am CET, Mondays to Fridays. We are independent from governments and institutions, so you get our honest, sharp and frequently humorous take on the news and the debate. The subjects we are currently focusing on are all the issues relevant to the eurozone - the discussion about Greece naturally, on quantitative easing and its various effects, the incipient eurozone recovery, relations between the eurozone and the world, as well as important developments in member states, with a repercussion on the rest of the eurzone. 

Many people were surprised by the re-emergence of the eurozone crisis. Eurointelligence readers would not have been. We have given our readers an honest assessment of what and what has not been resolved, at a level of a detail that has no match in the published media. Eurointelligence is the place to go to keep ahead of events in the eurozone.

I would like to invite you to register for a free 3-day trial, without commitment, so you can judge for yourself.

Wolfgang Münchau
Director Eurointelligence