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Europe

Portuguese government hangs by a thread ahead of budget vote

The minority government in Lisbon is on the brink of collapse, and in a bed of its own making. The prime minister threatened to resign if parliament rejected his austerity plan, and the opposition may call his bluff.

Jose Socrates

Prime Minister Socrates may have talked himself into a corner

The Portuguese parliament is expected to reject the government's latest round of budget cuts in a vote later on Wednesday, a move that could throw the heavily indebted country into political turmoil.

Prime Minister Jose Socrates said he would resign if the parliamentary vote goes against him. The leader of the Socialist minority government says overturning the bill would force Portugal to seek international financial assistance, a move he opposes.

"The prime minister does not want to resign, but he cannot govern against his convictions," the Socialist party's parliamentary leader, Francisco Assis, told reporters late on Tuesday. Assis blamed the opposition Social Democrats for "opening a political crisis at the wrong moment" despite the government's willingness to negotiate a solution.

The Social Democrats had supported three previous austerity plans over the past 12 months, but they are campaigning against the current measures, and have begun talking about snap elections.

The Socialists have 97 of 230 seats in parliament and now no allies on whom they can rely. The bill needs at least 116 votes to pass. New taxes and cuts in state pensions and government spending are included in the rather draconian austerity package, part of the government's plan to get its budget deficit down to 4.6 percent of gross domestic product this year.

Anibal Cavaco Silva

The president has said he won't come to the government's aid

With the country's borrowing rates already at record highs, it's looking increasingly likely that Portugal will follow in Greece and Ireland's footsteps, seeking loans with more equitable interest rates from the EU and International Monetary Fund.

Terrible timing

This turmoil precedes a European Union summit on Thursday and Friday in Brussels, where politicians are expected to approve a larger eurozone rescue fund for countries in debt-related difficulties.

Even if Prime Minister Socrates resigns on the eve of the Brussels summit, it's highly likely that he would still represent his country there, and that he would remain in charge domestically until snap elections could be arranged.

Socrates had already promised European leaders that his austerity plan would get through parliament - but opposition politicians in Portugal complain that they were snubbed in the planning process, as the government worked closely with European partners rather than lawmakers in Lisbon.

Portuguese President Anibal Cavaco Silva, who has the power to intervene in this matter before the parliamentary vote, appeared to give some credence to the opposition's complaints on Tuesday, saying he didn't believe presidential intervention was justified in this case.

"The manner in which the [austerity] program was presented, the lack of information … all this reduces substantially the room to maneuver," the president said.

Author: Mark Hallam (AFP, Reuters)
Editor: Nancy Isenson

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