Here we go again? First it was Greece; is it Portugal’s turn now? Stay tuned for more thrills and spills in Europe. From Tyler Durden at zerohedge.com:
Late last month we highlighted to reappointment of Portuguese PM Pedro Passos Coelho, noting that, in the words of Communist leader Jerónimo de Sousa, the President’s move to ignore the left’s attempt to form a government in the wake of largely inconclusive elections may be a “manifest waste of time.”
As FT put it a few weeks back, “no government on the left or right [can] hope to survive without support from the PS, which won 32.3 per cent [in October]” which means President Anibal Cavaco Silva might have made a mistake in propping up Coelho as the PM’s restoration will only serve to embolden an already angry left coalition.
Well sure enough, socialist leader Antonio Costa has now “formalized” plans to unite with the Left Bloc and Communists in order to reject the Coelho government. Here’s Bloomberg:
Portugal’s Socialists approved a plan to join forces with three other parties and oust Prime Minister Pedro Passos Coelho’s administration, raising the prospect of a new government committed to speeding the reversal of spending cuts tied to the country’s international bailout.
The Socialist-led program “is clearly less market-friendly than the one of the incumbent government,” analysts at the Royal Bank of Scotland Group Plc in London, including Clement Mary-Dauphin, said.
The Coelho government will fall if the Socialists and their allies close ranks and guarantee a majority in parliament to reject the program in a vote scheduled for Tuesday. President Anibal Cavaco Silva, who has the power to name prime ministers, would then decide if he’ll ask Costa to form a coalition. Parliament can’t be dissolved less than six months after it’s elected, meaning Cavaco Silva doesn’t have the option of calling fresh elections.
“The conditions are in place to form a Socialist Party government supported by a majority in parliament,” the party said in a statement e-mailed early on Monday. The Socialist government can be “stable” and last for a full term, it said.
Well, it can probably be “stable” domestically, but don’t think for a second that Brussels and Berlin are going to put up with this.
After all, the whole point of putting Alexis Tsipras through round after round of “mental waterboarding” over the summer was to discourage any Syriza sympathizers from attempting to use a euro exit (i.e. proving that the EMU is in fact “dissoluble” despite the protestations of many a eurocrat) as a bargaining chip on the way to negotiating for debt relief. As we put it, “the real question is whether or not the ATM lines, empty shelves, and gas station queues in Greece have had their intended psychological effect on Spanish (and Portuguese) voters. In other words, the question is whether the troika has succeeded in undercutting the democratic process outside of Greece by indirectly strong-arming the electorate.”
To continue reading: Black Swan Lands In Portugal