Portugal: Time of crisis for the government Coelho
Crucial is for the center-right minority government of Portugal today's vote in the House, as it is very likely that the left parties to topple in an attempt to form their own government under the Socialist Party, which they hope to end the years of austerity.
The possibility of a government that has the support of the Communist and other left parties has caused nervous investors and threatens to derail the fragile economic recovery in Portugal, who just last year came out of the rescue program.
The PSI 20 index of the Lisbon Stock Exchange recorded earlier losses 2.3% after falling more than 4% yesterday. Bond yields retreated from a high quarter that recorded yesterday, the 10-year yield to fall 6 basis points to 2.81%.
The center-right coalition of Prime Minister Pedro Passos Coelho won the most votes in the parliamentary elections of October 4 and vowed again Prime Minister to the President of the country last week.
But the coalition does not have a parliamentary majority, and the three center-left parties - the major opposition Socialists, the Communists and the Left Bloc - have combined more seats.
In an unexpected development that is unprecedented in 40 years of democracy in the country, the three left parties agreed to work together to reject the new government's program in the vote to be held this afternoon. That would force the government to resign.
"The left will remain united and reject the program of Passos Coelho, forcing the prime minister to resign," he commented in his report Antonio Barroso, vice president at consulting company Teneo Intelligence, says the Athens Press Agency.
In a potentially long and economically damaging process, President Aníbal Cavaco Silva could then ask the government of Passos Coelho to remain in leadership as a service in order to conduct re election next year or give the government a mandate to form the leader Socialist Antonio Costa.
If the Costa led a government with the Communists and the Left Bloc would be the first time that a Portuguese government involved parties of the radical left after 1974, when the country returned to democracy after right-wing dictatorship decades, said Barroso.
"The potential impact of this experiment is far from clear is, but probably will be mostly negative for the market," he commented. The Socialists could revoke the reforms and spending cuts implemented during the debt crisis and the rescue of Portugal, despite having promised to respect European budgetary objectives.
The largest trade union in Portugal, the CGTP, which is connected with the Communists, will hold this afternoon rally outside the parliament. A little earlier will precede another gathering in favor of the government.
Crucial is for the center-right minority government of Portugal today's vote in the House, as it is very likely that the left parties to topple in an attempt to form their own government under the Socialist Party, which they hope to end the years of austerity.
The possibility of a government that has the support of the Communist and other left parties has caused nervous investors and threatens to derail the fragile economic recovery in Portugal, who just last year came out of the rescue program.
The PSI 20 index of the Lisbon Stock Exchange recorded earlier losses 2.3% after falling more than 4% yesterday. Bond yields retreated from a high quarter that recorded yesterday, the 10-year yield to fall 6 basis points to 2.81%.
The center-right coalition of Prime Minister Pedro Passos Coelho won the most votes in the parliamentary elections of October 4 and vowed again Prime Minister to the President of the country last week.
But the coalition does not have a parliamentary majority, and the three center-left parties - the major opposition Socialists, the Communists and the Left Bloc - have combined more seats.
In an unexpected development that is unprecedented in 40 years of democracy in the country, the three left parties agreed to work together to reject the new government's program in the vote to be held this afternoon. That would force the government to resign.
"The left will remain united and reject the program of Passos Coelho, forcing the prime minister to resign," he commented in his report Antonio Barroso, vice president at consulting company Teneo Intelligence, says the Athens Press Agency.
In a potentially long and economically damaging process, President Aníbal Cavaco Silva could then ask the government of Passos Coelho to remain in leadership as a service in order to conduct re election next year or give the government a mandate to form the leader Socialist Antonio Costa.
If the Costa led a government with the Communists and the Left Bloc would be the first time that a Portuguese government involved parties of the radical left after 1974, when the country returned to democracy after right-wing dictatorship decades, said Barroso.
"The potential impact of this experiment is far from clear is, but probably will be mostly negative for the market," he commented. The Socialists could revoke the reforms and spending cuts implemented during the debt crisis and the rescue of Portugal, despite having promised to respect European budgetary objectives.
The largest trade union in Portugal, the CGTP, which is connected with the Communists, will hold this afternoon rally outside the parliament. A little earlier will precede another gathering in favor of the government.
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