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Portuguese caretaker PM could not sign up to bail-out
Date 23/03/2011 15:59  Author webmaster  Hits 938  Language Global
23 MAR 2011

By Leigh Phillips

EUOBSERVER / BRUSSELS - Engulfed in problems, Portugal's government could fall just one day ahead of a crucial European summit where the bloc's leaders are set to put the finishing touches on a grand 'comprehensive response' to the eurozone crisis.

Analysts warn however that should Prime Minister Jose Socrates step down, a caretaker administration would not have the political legitimacy to sign up to any EU-IMF bail-out should one be forced on the country.

In a political world turned upside down, the country's right-wing opposition is refusing to back the centre-left minority government's proposed cuts to social spending.

The fourth round of austerity announced in a year, the governing Socialists' programme of cuts, focussing on pensions, healthcare and welfare benefits, is to be put to a vote in the parliament on Wednesday.

The government is expected to lose as the parties to its left, the Left Bloc and the Communists, have never backed the government's strategy for exiting the crisis, and now the Social Democrats (PSD), which despite their name are a conservative party and which Lisbon has depended upon until this week to push through its slash-and-burn approach, has changed tack and denounced the new measures as not "credible".

The PSD described the new austerity measures as representing: "the continued failure of government to implement a coherent, credible and sustainable program of structural reform aimed at fiscal consolidation, public debt reduction and economic growth".

On the streets meanwhile, some of the largest demonstrations since democracy returned to the country in 1974 highlight the turmoil the country is undergoing. Last weekend, a record 500,000 individuals took part in a march unconnected to any political party or trade union but organised by a pair of students on Facebook.

Should Prime Minister Jose Socrates lose the vote, he would have to resign and call a snap election, although he would still attend the EU summit in Brussels in a caretaker capacity.

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