Left wing parties were expected to form a government in Portugal this week. A vote of no confidence on Tuesday of last week brought down the shortest-lived government since Portugal’s revolution, lasting just 11 days.
The right wing Portugal Ahead slate won more MPs than any other party in last month’s election. But the Labour-type Socialist Party (PS), the Communist Party and the more radical Left Bloc had more between them.
They have reached a coalition agreement including a halt to privatisations, a reversal of public sector wage cuts and an unfreezing of pensions.
But they also commit to paying Portugal’s debt, which European institutions have used to enforce austerity.
Even leading Left Bloc member Francisco Louca warned that without “debt restructuring”, “there will be no leeway to resist external pressures”.
Last time the PS was in government it began Portugal’s bailout and made it easier to sack workers.
This may be why the prospect of a new government that sounded like it should frighten the bankers calmed bond markets.
A rejection of the Socialists’ austerity saw the Left Bloc get its biggest ever vote.
If a PS budget brings new attacks on workers, socialists need to lead fights against them—not be in government backing them.