Portugal's PM seeks government with left radicals

Costa's appointment as prime minister on Tuesday came after his unprecedented anti-austerity alliance with Communists, Greens and the radical Left Bloc toppled Portugal's 11-day-old conservative minority government this month, after a dramatic parliamentary vote in October.

Following the success of the pact, Costa is now trying to persuade the Portuguese President, Anibal Cavaco Silva, to allow him to form a government with the Communist Party and the Left bloc.

Anti-austerity measures

The key aim of the alliance is to ease austerity measures which were adopted after Portugal's 78 billion-euro ($83 billion) bailout in 2011. The country only stopped receiving payments in May 2014.

Austerity seemed to be reaping its first positive results in 2015, with the Portuguese economy growing 1.5 percent in the first half of this year compared to the same period last year. The unemployment rate also fell to around 12 percent, compared to 17.5 percent in early 2013.

The opposition, however, claims that austerity has hit the middle class too hard and "destroyed millions of Portuguese lives," according to the Communist Party official Jeronimo de Sousa.

The leftist alliance intends to roll back tax cuts, as well as cuts in pay, pensions and public services. There has also been speculation about restoring several public holidays that were cut to boost productivity.

President wary of radicals

If successful, the left alliance would be the first ruling coalition to include the Communists and the Left Bloc in Portugals's modern political history. The country only returned to democracy in 1974, after decades of right-wing dictatorship. Although the Left Bloc and Communists wouldn't strictly be members of the government, they would still have pledged to support the Socialist party's movement.

Silva, however, is cautious of allowing extremist parties any extent of power and could instead decide to establish a caretaker administration until new elections are held.

After appointing Costa as prime minister on Tuesday, Silcia insisted that the Social Party leader respects Portugal's commitments to the European Union's stability pact, whereby all eurozone members are required to reduce budget deficits to below 3 percent of GDP.

Other requests include commitment to defense pacts such as NATO - which the Communists have rejected - and assurances from the socialist government on the stability of the country's financial system. The latter is largely due to fears that the Socialists might try and reverse or prevent a privatisaton program of Novo Banco - the bank used to rescue Banco Espirito Santo from bankruptcy in 2014.

At present, Costa's Socialist Party holds 86 of the Portuguese parliament's 230 seats. The Left Bloc accounts for 19 and the coalition between the Communist Party and the Greens for another 17. The remaining seats are held by the toppled Conservatives, the Social Democrats and the People-Animals-Nature party.

ksb/msh (AFP, AP)