Portugal's right-wing president Cavaco Silva this evening invited the Passos Coelho/Paulo Portas centre-right coalition government to return to power after its general election win, even though it will be outnumbered in parliament by opposition party MPs who have pledged to force out the coalition 'within days.'
The coalition won the October 4th election with 38.4% of the votes so will now try and rule as a minority government under Pedro Passos Coelho as prime minister.
An unprecedented alliance of left-of-centre parties, led by the Socialists with the Communist Party and the Left Bloc in a loose partnership, has 122 seats in the 230-seat assembly leaving the coalition powerless.
The opposition says its members will use its majority number of MPs to bring down the government and take power itself.
The political environment in Portugal is unsettled and is affecting its relationships with foreign states, financial markets and the EC.
The last Passos Coelho's government launched harsh austerity measures and tax hikes over the past four years as part of the terms of a bailout, which plunged Portugal into a three-year recession.
The centre-right coalition says more austerity is needed having managed a budget deficit last year of 7.2%, the second poorest performance in the Eurozone. Government debt remains high at 130% of gross domestic product, the third highest in the EU with an average growth of under 1%.
Cavaco Silva faced an unenviable choice of unleashing a pent-up left wing alliance which has pledged to renegotiate the country's Troika debt, remove the country from NATO, reverse privatisations and much else on a barely concealed far left agenda, or bring back a Passos Coelho government that has no power to enact a single piece of legislation without the backing of its left wing opposition
Cavaco Silva addressed the nation on Thursday evening, saying that he could not give power to a government that opposed Portugal's membership of international institutions such as the European Union and the 19-nation Eurozone. Wishing for stability, the president has created the conditions for a left wing backlash of epic proportion.
Cavaco Silva said it was now up to lawmakers in parliament to decide on the new government's programme, which must be presented in ten days time. If it is rejected in parliament, the government will collapse.
Both the Communist Party and the Left Bloc had campaigned against the policies of the abouve institutions, even though the Socialist Party has said it would abide by Eurozone financial rules.
"If out of the EU and the Eurozone, Portugal's future would be catastrophic," Cavaco Silva said, adding that Portugal risked losing what it had gained after four long years of hardship.
"I have to tell the Portuguese that I fear a loss of confidence in Portugal by foreign institutions, our creditors, and investors in foreign markets. The confidence and the credibility of our country are essential for investment and job creation," said the president.
The coalition over the past four years has enforced highly unpopular cuts and tax rises and now has ten days to appoint members to a government which then needs parliamentary approval for its next four year programme, which of course the left wing parties say there will not agree to.
The general secretary of the Socialist Party accused the president of creating a "useless political crisis" by nominating Passos Coelho as prime minister because the PSD/CDS-PP coalition "does not have majority support in parliament."
Cavaco Silva ends his less than sparkling presidency in January 2016 and he, or his successor at some point will have to call another general election which, according to constitutional rules, cannot happen until June 2016 at the earliest. In the meantime Portugal's leaders are rudderless, hampered, irritated and impotent.
