The Portuguese government heads to the Eurogroup meeting on Monday having seemingly overcome the crisis that has rocked it over the past week following the resignation of Foreign Minister Paulo Portas.
Prime Minister Pedro Passos Coelho, leader of the center-right Social Democratic Party (PSD), gave a press conference on Saturday to assure the country, Europe and investors that the new coalition emerging from the crisis would be solid and last until the end of the current parliamentary term in 2015. To his right, Portas — who is the leader of the Christian Democrats (CDS-PP), Passos Coelho’s conservative governing partner — listened on in silence, with crossed arms and poker face.
Following a week of frenetic negotiations in which President Aníbal Cavaco Silva played a decisive behind-the-scenes role, Portas will now stay on in government as deputy prime minister with more power and responsibility in the crucial area of the economy.
Portas presented his “irrevocable” resignation last Tuesday, putting the country’s political stability at risk and creating sufficient panic to sink the stock market in a day and sending interest rates on Portuguese government bonds through the roof. The reasons were to be found in his long-running disagreements with Passos Coelho. But the final straw was the naming of Maria Luisa Albuquerque as new finance minister, who Portas believed would continue along the same economic path of austerity at all costs and uncomplaining acceptance of the conditions imposed by the so-called troika of the IMF, Brussels and the European Central Bank.