Jose Socrates Resigns: Portugal Opposition Blocks Austerity Plan
Portugal PM Jose Socrates Resigns after Opposition Blocks Austerity Measures
Portuguese Prime Minister Jose Socrates said that he will resign if the nation's parliament does not pass a series of austerity measures intended to keep Portugal on its feet. Opposition parties are expected to reject the measures, and instead seek an EU bailout. [Update: Portugal's opposition parties have indeed blocked the austerity measures, and, after meeting with President Cavaco Silva, PM Jose Socrates announced his resignation.]
Arguably, Portugal can't avoid seeking a bailout no matter what it does.
If Jose Socrates indeed resigns, his minority Socialist government would collapse. Portugal's President, Cavaco Silva, would only accept Socrates' resignation after the EU summit in Brussels on Thursday and Friday, and then parliament would be dissolved ahead of a snap election.
The austerity plan needs 116 votes to pass. Socrates' government holds 97 parliamentary seats out of 230 and has no reliable allies. Indeed, opposing parties are uniting to defeat the austerity plan, and the Social Democrats are gearing up for a snap election in the event of Jose Socrates' resignation.
Meanwhile, Brussels is unlikely to approve an enhanced euro-zone rescue fund until later this year.
All opposition parties have proposed resolutions calling for the rejection of the measures, which reduce pensions and state spending.
The main opposition Social Democrats, who have previously backed austerity, have begun talking about a snap election.