Portugal's Prime Minister, Antonio Costa stated yesterday that he would not resign and would "face up to the difficulties", if his proposed budget is rejected.
Portuguese MP's are set to vote on the minority government's 2022 state budget proposal in Parliament today. Left-wing parties have stated that they will not support Costa's Socialist party (PS), leading to threats of snap elections.
Portugal's conservative president has warned that he will use his power to dissolve parliament and call early legislative elections if the budget is rejected.
"The government's duty, my duty, is not to turn its back in a moment of difficulty," he told MPs at the opening of the budget debate.
"We will do everything to find an agreement, but we will not do it at any price," Costa added.
"Let us respect the Portuguese citizens who do not want a political crisis," he insisted, calling on parties to back the bill.
The ruling coalition government was thrown into disarray when the Communist Party (PCP) refused to back the proposed budget.
Meanwhile, the Bloco de Esquerda (BE), which has traditionally supported the Socialists, has been engaged in tense negotiations with the government in recent days.
Both parties have accused Costa's government of not doing enough in the draft budget to increase the purchasing power of ordinary Portuguese citizens and improve public services.
Yesterday, Costa told MPs that his government had made a "serious effort to come closer" to the parties' wishes.
The centre-left PS hold only 108 seats in Portugal's 230-seat parliament and relies on support from allies for the budget to receive approval. Amid their struggles for support, President de Sousa issued a stark warning on Monday.
"My position is very simple; either there is a budget or there will be a dissolution," the head of state said. The next legislative elections in Portugal are currently scheduled for autumn 2023.
Portugal's proposed budget is key to reviving the country's economy with €9.7 billion of EU-allocated funds following the COVID-19 pandemic.
Last year's proposal was only narrowly passed after the communist-green coalition of parties abstained from voting.
Costa came to power in 2015 in an unprecedented alliance with left-wing parties to remove Portugal's conservative Social Democratic Party (PSD) from power.
In 2019, however, Costa ruled out a global governability agreement and opted for case-by-case negotiations on legislation.
His party triumphed overall in last month's municipal elections but polled lower than in 2017 and suffered a surprise defeat in the capital Lisbon.
The opposition PSD are themselves set to hold an internal leadership election in December.