Anti-austerity lawmakers forced Portugal’s center-right government to resign Tuesday by rejecting its policy proposals at the start of what was supposed to be a second consecutive term in office — and four more years of cutbacks and economic reforms.
The government’s dramatic collapse came less than two weeks after it was sworn in and raised questions about debt-heavy Portugal*s commitment to the fiscal discipline demanded of countries sharing the euro currency.
The moderate Socialist Party forged an unprecedented alliance with the Communist Party and the radical Left Bloc to get a 122-seat majority in the 230-seat Parliament, which it used to vote down the proposals. The defeat brought the government’s automatic resignation.
The government’s fall was also a political setback for the 19-nation eurozone’s austerity strategy. The policy of cutbacks was demanded by Germany and the others as a remedy for the bloc*s recent financial crisis.
Eurozone leaders had pointed to Portugal, and Ireland, as examples of how austerity paid off as their economies improved. Now, the progress Portugal made is in doubt, and some fear the country could go down the same road as Greece, which has needed three bailouts since 2010.