Opposition To Portugal’s Austerity Measures Threatens To Dissolve The Government
Vincent Fernando, CFA
Oct. 15, 2010
The Portuguese government is detailing its 2011 austerity budget today, which might prove its undoing.
The nation’s largest trade union has already announced a strike for November 27th and prime minister José Sócrates has a shaky coalition of support,
Yet he’s playing a game of chicken he could easily lose:
Mr Sócrates has threatened to resign and call general elections if his budget is not approved on October 29th, opening the door to a prolonged period of uncertainty with a caretaker government which would have insufficient political clout to negotiate financial bailouts with international bodies and probably cause a sell-off of Portuguese bonds.
President Aníbal Cavaco Silva will stand for re-election in the January presidential elections, and under Portugal’s electoral law it would be impossible to hold general elections before May next year.
The main opposition Social Democrats (PSD), with 81 seats in the 230 seat assembly, backed the government in earlier austerity measures last May, but has not yet decided whether to support the budget and keep Mr Socrates in power or to vote against it and bring down the government.
Could Portugal’s government be the first to dissolve due to austerity?