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Portugal PM warns against budget impasse

Portuguese Prime Minister Antonio Costa on Tuesday urged parliament not to reject a 2022 draft budget it is to vote on next week to avoid political instability and potential early elections.

“After the terrible drama we have known with the pandemic it would be wholly irrational to add political dramas,” the Socialist minority head of government said as he prepared to hold talks with radical leftist leaders who helped him into office in 2015.

“The only rational thing to do is to adopt the budget in order to stay on the path of recovery” from the health crisis, he insisted.

While both the Communnist Party and the Left Bloc have said they are open to negotiations on the package they have both warned they reserve the right to vote it down in a first reading on October 27.

Conservative President Marcelo Rebelo de Sousa, who has the power to disolve parliament, has warned that if the budget does not receive assent there may have to be legislative elections.

Costa did win the support of his leftist allies to enable budget approval during his first term but he has been less able to count on them since a winning a second term in 2019.

A 2021 finance bill was adopted narrowly after Communists and Greens abstained.

The hard left accuses the government of not going far enough to overturn austerity measures and liberal labour market reforms passed by the previous centre-right government between 2011 and 2014 as conditions of an international bailout.