Portugal's parliament threw out the minority Socialist government's 2022 budget bill on Wednesday, paving the way for snap elections and ending six years of relative political stability under Prime Minister Antonio Costa, APA reports citing Reuters.
Costa's hard-left former allies sided with the conservatives to defeat the bill that envisaged income tax cuts for the middle class and increased public investment while cutting the deficit to 3.2% of gross domestic product from 4.3% in 2021.
The Communists and Left Bloc said Costa had ignored their demands for more protection for workers, improvements in the social security system and more public investment in the health service as he was too focused on deficit cuts.
Costa argued he could not risk damaging hard-earned international credibility in a country with one of the heaviest public debt burdens in Europe and which was subject to painful austerity from 2011 to 2014 under an international bailout.
While the rejection of a budget does not necessarily imply snap elections, President Marcelo Rebelo de Sousa warned on Monday that he would have no option but to dissolve parliament and hold elections two years ahead of schedule. read more
That entails consultations with the main political parties, Costa and the president's Council of State that could take several weeks.
In a statement published on the presidency's website, Rebelo de Sousa said he would meet Costa and parliament's speaker, Eduardo Ferro Rodrigues, later on Wednesday.
The president will then hold talks with the main political parties on Saturday, and the Council of State meeting is scheduled to take place next Wednesday. The statement did not mention an election.
Ferro Rodrigues consulted representatives of most parties on Tuesday at the president's request, and the two hard-left parties suggested that an alternative to the dissolution would be for the government come up with a new budget proposal, Expresso newspaper said.