Leftist alliance moves closer to power in Portugal after Communists back Socialists

LISBON, Portugal – Portugal’s Communist Party announced Friday it has reached an agreement to back its Socialist Party ally, paving the way for a possible ouster of the country’s new centre-right government.

The deal came after an earlier agreement between the moderate, mainstream Socialists and the radical Left Bloc.

Together the three parties have 122 seats in the 230-seat Parliament, outnumbering the government, and have vowed to reject the government’s four-year policy program in a vote next week.

Such a defeat would force the government, which took office on Oct. 30, to resign, possibly opening the door for the unprecedented leftist alliance to take over. However, changes in government are overseen by Portugal’s president, who could also name a caretaker government until new elections are held.

The Communist Party said that after days of talks it had sent the Socialists the text of a “joint position” aimed at pushing out the government. The Socialist Party made no immediate comment.

The development came after several weeks of political tension following the Oct. 4 election.

At the heart of the political friction are the austerity policies introduced after debt-heavy Portugal’s 78 billion euro ($85 billion) bailout in 2011 amid a financial crisis that gripped countries sharing the euro currency. The government says public spending must remain frugal to lower debt. Its left-of-centre opponents want to ease austerity and reverse pay and pension cuts.

Prime Minister Pedro Passos Coelho said Friday he is ready to negotiate policies with the Socialists but added that “any more government spending needs to be counterbalanced,” either by savings elsewhere or through taxes.

One hundred Portuguese business leaders have signed an open letter expressing concern about the political uncertainty and warning it could hurt the economy if it continues.