Snap election will not destabilize Portugal, says Minister of Economy

A quick election seems like the best option for ending Portugal’s political stalemate, and would not undermine its commitment to achieving fiscal goals or growth prospects, the economy minister said on Wednesday.

Early polls were likely after parliament last week rejected the 2022 minority government’s budget proposal, effectively ending six years of relative political stability under Prime Minister Antonio Costa, whose Socialist Party could pass laws under a two-party alliance arrangement. Economy Minister Pedro Siza Vieira told Reuters in an interview that snap elections “are probably the best way” out of the impasse, and expressed the hope that he would be part of a future government.

Parliament’s rejection of the budget does not automatically call for an election, but President Marcelo Rebelo de Sousa, who will address the nation on Thursday night, has said he may have no other option. Moody’s Investors Service called the budget impasse’s negative ‘and said it could hamper the country’s ability to use European Union funds designed to help it recover from a devastating coronavirus epidemic.

Siza Vieira acknowledged concerns about political instability that could delay EU funds, but said compliance with a recovery plan formulated by Brussels in 2014, when Portugal left an international bailout, was out of the question. “We will continue to work to achieve these goals and we are on a good track for that,” he said. “Any future government – and I hope I will continue in office – will remain committed.”

SOCIALISTS AHEAD Opinion polls do not change the support for the Socialists much from the 36% they took in the last national elections in 2019, with the Social Democrats second at about 27%.

The left-wing allies of the Socialists, who vote in single figures, would probably lose seats, while far-right Chega could rise the third strongest party. Analysts say an election alone will not resolve the impasse, and Siza Vieira acknowledged that any new government would likely have to manage a “fragmented” parliament.

Portugal, however, whose economy has been greatly expanded for most of the Socialists’ tenure, has been able to support long-term growth, in addition to fiscal responsibility. “The country will commit to that and I do not expect any setbacks in that regard,” he said.

Siza Vieira echoed Finance Minister Joao Leao’s view that a quick election would not result in a diminishing credit rating, saying people should not “dramatize” the budget conflict. “We have seen countries for a long period without a budget or even an acting government … A budget will eventually be passed,” he said. (Written by Andrei Khalip and Catarina Demony, edited by Nathan Allen and John Stonestreet)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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