Talks on forming a new Portuguese coalition government have made no progress more than a week after the general election, outgoing conservative prime minister Pedro Passos Coelho admitted Tuesday after a meeting with opposition Socialist leader Antonio Costa.
“We have made no progress” a visibly frustrated Coelho told reporters, as his Portugal Ahead coalition seeks partners to form a majority government.
“I expect the Socialist Party to come up with a counter-proposal,” he added, without announcing any later meeting.
A first meeting last week also proved unfruitful.
Costa for his part called the right-leaning coalition’s proposals “insufficient,” complaining that they “don’t put across the political will to break with austerity”.
The Socialists came second in the October 4 polls, trailing Coelho’s coalition which took 38.9 percent of votes despite overseeing four years of painful austerity in the bailed-out country, although it lost its absolute parliamentary majority.
After scoffing at the idea of forming a grand coalition with the centre-right, Socialist leader Antonio Costa on Monday said he had identified “points of convergence”.
In a document addressed to the Socialists in a bid to forge a deal, Coelho’s coalition said it was prepared to take on board several measures of the Socialist programme in order to “guarantee indispensable government stability”.
– ‘Passive’ Costa –
Coelho, frustrated by what he called his “passive” negotiating partner, stressed that it was “fundamental that the country knows whether or not the Socialist Party has the political will to reach an agreement” on entering a broad coalition.
Portugal emerged in May 2014 from a three-year, 78-billion-euro ($88-billion) international bailout, and the prospect of a fragile government has rattled investors.
The financial markets have already been spooked by the political uncertainty, shedding 3 percent on Monday and a further 1.4 percent on Tuesday.
In a bid to reassure investors, Costa told AFP earlier Tuesday that a left-wing government would respect trade commitments and would avoid any new crises in the eurozone.
“Europe can rest easy, the Socialist Party is not Syriza,” Costa said, in reference to Greece’s radical-left ruling party which earlier this year saw the country edge very near a chaotic fallout from the eurozone.
But the Socialist leader made it clear that the negotiations with Coelho’s coalition were not over and said his party would reply in writing to its proposals while continuing its dialogue with the left-wing parties.
While nothing is decided, the Socialists appear more advanced in their talks with the Communists and the Left Bloc coalition than with the right.
Costa has given himself until the end of the week to submit a definitive proposal for a course of action to his party.
But the last word remains with President Anibal Cavaco Silva, who has let it be known that his idea of a stable government would not include the Communist Party which is hostile to the euro or the Left Bloc which is a supporter of a debt renegotiation.