Portugal’s incoming PM in race to form govt before EU summit

Portugal’s incoming prime minister Pedro Passos Coelho raced against the clock Tuesday to form a coalition government in time to be sworn in ahead of a June 23 summit of European Union leaders.

President Anibal Cavaco Silva instructed the head of the centre-right Social Democrats, which defeated the ruling Socialists in a general election on Sunday, to immediately” begin work on putting together a coalition government even though all the votes from overseas have not yet been counted.

The new government will be tasked with pushing through deep spending cuts and economic reforms agreed to under a 78 billion euro ($114 billion) bailout deal reached in May with the European Union and the Internatinal Monetary Fund.

“Given the situation the country finds itself in, it would be good if the government was sworn in as quickly as possible,” the president said late on Monday after meeting with Passos Coelho.

The president said “it would be desirable” if the new government was already in power by the time of the summit but if this was not possible Portugal would be represented in Brussels by outgoing prime minister Jose Socrates.

EU leaders are expected to discuss the European debt crisis at the summit and Greece’s need for more money a year after it received its EU-IMF bailout.

Under the Portuguese constitution the president can only formally nominate the prime minister once the final official results of the election, including the overseas ballots, are published, which will be on June 15.

With four seats related to the overseas vote yet to be decided, the Social Democrats won 105 seats in the 230-seat legislature.

Passos Coelho, who has no previous government experience, said on election night that he would seek to form a coalition government with smaller conservative CDS-PP party, which finished third with 24 seats.

The two parties together have a combined 129 seats, an absolute majority in parliament. They last governed in a coalition between 2002 and 2005.

The Social Demcorats and the CDS-PP will now have to set aside their differences to negotiate their governing coalition agreement in record time.

CDS-PP leaders will meet Tuesday in Lisbon. They have said that they do not want to carry out their negotiations with the Social Democrats in public.

But the differences between the two parties were exposed during the election campaign.

They are mainly centered on the number of ministers which each party will have in cabinet and what their role will be.

The issue is complicated by the fact that Passos Coelho has promised to have a cabinet made up of only 10 ministers.

The two parties also differ on political issues such as privatisations, fiscal reforms and pensions.

CDS-PP leader Paulo Portas has already warned the negotiation over a coalition government programme “will be very intense” given the “deep” differences between the two parties over social issues.

The CDS-PP presents itself as “the party of the poorest and the underprivileged” and calls for “adjustments” to the demanding EU-IMF bailout programme.

Portas has also expressed reservations over the size of the PSD’s plans to streamline the civil service.

Passos Coelho plans to replace only one in every five employees who leave the civil service due to reirement or for another job.

“Passos Coelho obtained from the country the total legitimacy to form the next government and apply a programme of change,” daily newspaper Publico wrote in an editorial Tuesday.

“The coming days will be key to proving that he also has the authority that is needed to do it. It will be his first trial by fire.”