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Portugal PM issues stark warning ahead of crunch vote

Portugal’s centre-right Prime Minister Pedro Passos Coelho warned Monday about the potentially-ruinous effect of a leftwing alliance taking power, on the eve of a crucial parliamentary vote set to topple his government.

If the alliance succeeds in ousting his government, it would introduce policies which “would ruin Portugal,” he warned, accusing the newly-formed bloc of wanting to push through “a short-term and unrealistic programme” which “would be viewed as a threat” to the country’s economic recovery.

Passos Coelho’s remarks were made as he unveiled the programme of his new minority government which was sworn in just 10 days ago but seems certain to be ousted by a leftwing alliance in a dramatic parliamentary vote set for Tuesday.

His remarks played on European fears about the prospect of a leftwing coalition taking power in a country still recovering after receiving a 78 billion-euro ($87-billion) bailout in exchange for strict austerity measures.

In a sign of investor concerns over the political crisis, the Lisbon stock exchange closed sharply lower, plunging 4.05 percent.

Passos Coelho’s coalition won the most mandates in the October 4 elections, but lost the absolute majority it had enjoyed since 2011, winning only 107 of the parliament’s 230 seats.

Now his fledgling government’s existence is hanging by a thread, with the main opposition Socialist Party — which has formed an unprecedented alliance with the radical Left Bloc and the Communists — poised to replace it.

The parliamentary session on his government’s programme began around 1500 GMT on Monday and was set to continue into Tuesday.

Together, the Socialists, the Communists and the Left Bloc — which is close to Greece’s ruling Syriza party — hold 122 seats out of the 230 in parliament, giving them the majority needed to pass a motion against the government’s programme.

Such a motion will be tabled on Tuesday by Socialist leader Antonio Costa, the former mayor of Lisbon.

– Portugal’s briefest government? –

If the leftists succeed, the vote would force the government to resign after just 11 days in power — which would make Passos Coelho’s administration the shortest in Portugal’s history.

Anxious to reassure creditors, Costa has repeatedly said that any Socialist-led government would respect Portugal’s international commitments.

“All the conditions have been met to ensure a stable, responsible, consistent and lasting government,” Costa said late Sunday.

The alliance between the Socialists, the Communists and the Left Bloc is the first of its kind since the birth of a democratic Portugal in 1974, and had seemed unimaginable just weeks ago due to the differences between the various leftist groups.