Left
turn in Lisbon
Portugal’s
defeated Socialists seek government deal with far left.
By PAUL AMES
10/14/15, 6:01 PM CET Updated 10/14/15, 9:24 PM CET
LISBON — Ten days
after losing Portugal’s election, Socialist leader António Costa
is attempting to forge an anti-austerity alliance with the Communists
and other radical anti-euro leftists to oust conservative Prime
Minister Pedro Passos Coelho.
Such a deal would
turn Portuguese politics on its head. Costa is racing to reassure
jittery markets and worried eurozone partners that a leftist
government would remain committed to the single currency.
“Europe can rest
easy, the Socialist Party is not Syriza,” Costa told Agence France
Press in a spate of hastily arranged interviews Tuesday. “Investors
shouldn’t be concerned.”
While Costa was
passing on comforting words to European ambassadors Wednesday,
technical teams from the Socialist Party (PS) were meeting with
counterparts from the Portuguese Communist Party (PCP) and the
Syriza-allied Left Bloc (BE) to draft terms of a government deal.
Costa insists his
potential partners on the hard left have dropped their more radical
demands, such as pulling out of NATO, large-scale nationalization,
renegotiation of the national debt and withdrawal from the eurozone.
“What I want to
transmit, especially to markets, is that Portugal will maintain the
stability of its European commitments,” he told Reuters. “For the
first time, there can be a government that reflects the left’s
majority in parliament, without posing a risk to European rules.”
Yet the Socialists
will face a hard task seeking to simultaneously abide by euro-zone
budgetary rigor, making Portugal’s fragile economy more
competitive, and fulfill a left-wing wish list that includes higher
wages and pensions, tax cuts and greater welfare protection.
“Markets would see
a government that includes the two ultra-left parties with deep
suspicion,” warned Holger Schmieding, chief economist at Berenberg
bank in London.
“Any serious
reform reversal or loose talk about leaving the euro or NATO would
likely cause a major rise in borrowing costs and possibly a new
crisis,” he told POLITICO. “It would take very strong assurances
from a left-wing government … to alleviate such concerns.”
Leftist gains
The elections on
October 4 were a disaster for Costa, who squandered an early poll
lead and handed victory to Passos Coelho‘s center-right coalition,
which captured 104 seats in the Assembleia da República, ahead of
the Socialists with 85.
Passos Coelho fell
short of an absolute majority, however. Voter dissatisfaction after
four years of austerity gave the Left Bloc its best-ever result with
19 seats, while the hardline Communists captured 17.
Nevertheless,
President Aníbal Cavaco Silva gave Passos Coelho the lead in forming
a government.
The traditionally
moderate and pro-euro Socialists were expected to line up behind a
center-right program that eased up gradually on austerity but stuck
to commitments to keep bringing down the budget deficit and reduce
the eurozone’s third-highest public debt.
Costa has yet to
completely rule out a compromise with the center-right, but he’s
made clear his preference is for a deal with the far left that makes
him prime minister.
“We made
absolutely no progress,” Passos Coelho complained after presenting
Costa with a list of concessions Tuesday to tempt his rival into a
centrist accord.
“We hoped we’d
get some counter-proposals from them, but this didn’t happen,”
Passos Coelho told reporters. “The country needs to know if there
is the political will to find an agreement.”
European
power-brokers in Brussels and Berlin had welcomed Passos Coelho’s
election victory as a sign eurozone governments could push through
painful reforms and get re-elected.
Markets rattled
With over 70 percent
voting for mainstream parties on the right and left, Portugal was
held up as a contrast to radicalized Greece, where Syriza defeated
middle-of-the-road parties twice in elections this year, and Spain
and Ireland, who have seen anti-establishment parties surge as polls
approach.
As yet there’s no
market panic in Portugal — or talk of a “Poxit” — but markets
are starting to worry.
Lisbon’s stock
exchange fell by almost 5 percent early this week, with banks hardest
hit. The government managed to sell €1.3 billion in bonds
Wednesday, but at higher rates than the last sale back in February.
The coming days will
be crucial in determining Portugal’s direction.
Some Socialists are
unhappy with Costa cozying up to the far left. They fear a rupture
with the moderate stance forged by the party since the heady days of
the mid-1970s, when Portugal flirted with far-left rule after
overthrowing four decades of rightist dictatorship.
Veteran Socialist
lawmaker José Lello said the Communists and Left Bloc “aren’t
being serious.”
“Two weeks ago
they were saying something completely different, they are not going
to accept the euro, nor the (eurozone) Fiscal Compact, nor anything
else, have they really changed?” he said to reporters.
A revolt by a
handful of Socialist moderates in parliament could scuttle Costa’s
outreach to the far left.
Failing that,
Portugal looks set for more political uncertainty, be it under a
Socialist government dependent on the far-left, or a center-right
administration kept in power by Socialist votes. Either way, the
result looks to be a weakened government with a high risk of fresh
elections next year.
Authors:
Paul Ames
Sem comentários:
Enviar um comentário