Portugal Usurps Democracy in Latest Euro Zone crisis

 

For those unaware or to explain more accurately the ongoing crisis in Europe that continues to escalate, the worry in Brussels has always been that either Spain, Portugal or, in a less likely scenario, Italy, would go the way of Greece by electing politicians that would seek to roll back austerity, shun fiscal rectitude, and demand debt relief. 

This is why Berlin adopted such a hard-line approach to negotiations with Alexis Tsipras and Yanis Varoufakis 'riding rough shod’ over their own people’s democratic referendums and elected Greek government voted mandate. There was never any hope of setting Athens on a “sustainable path.” It was always about deterring / discouraging or even more accurately intimidating more “meaningful” states from going the Syriza route. 

Well as it turns out, the troika’s efforts to subvert the democratic process in Greece by using the purse string to overthrow the government apparently did not deter the Portuguese leftists. Socialist leader Antonio Costa announced earlier in the week that he’s prepared to align with the Communists and with Left Bloc to form a government in defiance of the Right-wing coalition. The Left alliance would have an absolute majority in parliament and would most likely adopt an anti-austerity, and perhaps even an anti-euro, platform. This cannot be allowed apparantly !

In an effort to head off this eventuality, President Anibal Cavaco Silva appointed Pedro Passos Coelho to serve another term as PM on Thursday. That was a slap in the face for Costa. Silva’s decision is likely to leave Portugal mired in an intractable political stalemate which is just about the last thing Europe needs as Brussels attempts to put the Greek debacle in the rear-view mirror, while confronting the worsening refugee crisis. 

 

Sure enough, Costa is now threatening to topple the government on the heels of what is widely viewed as an usurpation of democracy. Here’s Reuters

Portugal's opposition Socialists pledged on Friday to topple the centre-right minority government with a no-confidence motion, saying the president had created "an unnecessary political crisis" by nominating Pedro Passos Coelho as prime minister.

The move could wreck Passos Coelho's efforts to get his centre-right government's programme passed in parliament in 10 days' time, extending the political uncertainty hanging over the country since an inconclusive Oct. 4 election.

This set up a confrontation with the main opposition Socialists, who have been trying to form their own coalition government with the hard left Communists and Left Bloc, who all want to end the centre-right's austerity policies

"The president has created an unnecessary political crisis" by naming Passos Coelho as prime minister," Socialist leader Antonio Costa said.

The Socialists and two leftist parties quickly showed that they control the most votes when parliament reopened on Friday, electing a Socialist speaker of the house and rejecting the centre-right candidate.

"This is the first institutional expression of the election results," Costa said. "In this election of speaker, parliament showed unequivocally the majority will of the Portuguese for a change in our democracy."

Antonio Barroso, senior vice president of the Teneo Intelligence consultancy in London, said Costa was likely to threaten any Socialist lawmaker with expulsion if they vote for the centre-right government's programme.

"Therefore, the government is likely to fall, which will put the ball back on the president's court," Barroso said in a note.


"This is the first institutional expression of the election results," Costa said. "In this election of speaker, parliament showed unequivocally the majority will of the Portuguese for a change in our democracy."

Antonio Barroso, senior vice president of the Teneo Intelligence consultancy in London, said Costa was likely to threaten any Socialist lawmaker with expulsion if they vote for the centre-right government's programme.

"Therefore, the government is likely to fall, which will put the ball back on the president's court," Barroso said in a note.

As a small reminder : Public debt is 127pc of GDP and total debt is 370pc, worse than in Greece. Net external liabilities are more than 220pc of GDP.

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Portugal has entered very dangerous political waters. For the first time since the creation of Europe’s monetary union, a member state has taken the explicit step of forbidding eurosceptic parties from taking office on the grounds of national interest !

Anibal Cavaco Silva, Portugal’s constitutional president, has refused to appoint a Left-wing coalition government even though it secured an absolute majority in the Portuguese parliament and won a mandate to smash the austerity regime bequeathed by the EU-IMF Troika.

He deemed it too risky to let the Left Bloc or the Communists come close to power, insisting that conservatives should soldier on as a minority in order to satisfy Brussels and appease foreign financial markets.

Democracy must take second place to the higher imperative of euro rules and membership.


To clarify exactly what's happened here. The will of the people is now being characterized as a "false signal" to "financial institutions, investors, and markets."

In other words, what voters want means absolutely nothing. This is about what "markets" and "financial instiutions" want. What the electorate wants is nothing more than a "false signal." 

 

The Telegraph's Ambrose Evans-Pritchard:

The Portuguese conservatives and their media allies behave as if the Left has no legitimate right to take power, and must be held in check by any means.

These reflexes are familiar – and chilling – to anybody familiar with 20th century Iberian history, or indeed Latin America. That it is being done in the name of the euro is entirely to be expected.


IPM Group : This crisis in the Euro Union will continue to bubble away. What we have is effectively a fixed currency peg that is strangling to death the Southern States of Europe. Now they are ignoring democratic elections. This only ends one way  - a rise in civil unrest and an eventual collossal debt crisis that tears the Euro currency apart. It's only a matter of time !


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