Analysis: Portugal’s new balance of power

Paulo Portas (conservative CDS) increases his power in a Government reshuffle but Passos Coelho (centre-right PSD) has him on a tighter political leash. It remains to be seen if the pieces of the coalition can be stuck together again.

Opinion — 24 July 2013 by Vitor Matos
Analysis: Portugal’s new balance of power

After 22 days Portugal’s political crisis is over. At least for now. The President of the Republic, Aníbal Cavaco Silva, has finally accepted the reshuffle put forward by the Prime Minister weeks ago. Life goes on and the Government too, but without a ‘National Salvation’ agreement with the PS. Next week, Pedro Passos Coelho will present a motion of confidence to Parliament, to re-legitimise the Government and provide proof that it is united in its PSD majority with its new ministers. There are three questions now on the table.

1 – How has political influence been redistributed now in Portugal?

The CDS, the minority coalition party, which bagged 12% of the votes in the elections in 2011, increases its power in relation to the PSD, which garnered 38%. From the CDS’s point-of-view, it seems that the tantrums Paulo Portas made over the appointment of Maria Luís Albuquerque to Finance, leading to his resignation as Minister of Foreign Affairs, has paid off with his promotion to Prime Minister. This doesn’t cut ice with the public. However, at the same time, Portas gets to coordinate the Government’s economic policy, relations with the ‘troika’ and gets his best childhood buddy, the manager António Pires de Lima, as Minister of the Economy.

Portas seems to have won hands down, but Passos Coelho has done little more than shackle himself to one of the most difficult politicians in the Government, but at the same time tying Portas down to Government policies for which he has now to be responsible. The main change in the Government is this: Portas seems to have increased his power base, but is more tied than ever. The big unknown is whether these two men who have problems getting on, will be able to listen to one another and give ground without the coalition splitting apart again.

2 – What’s changed with the new ministers?

In Economy, António Pires de Lima, who ran one of the largest Portuguese soft drinks companies, Unicer, has a key role in kick-starting the economy. The stakes are high and so are the expectations, when before they were low under ex-minister, Santos Pereira, and the task will be a hard one. He has before him complicated dossiers, with the privatisation of TAP, CTT and the re-negotiations of the PPPs. He will have, moreover, a pivotal role for the PSD which means keeping Portas on a tight leash and steering him in the direction of good sense. Pires de Lima is president of the CDS national council and a childhood friend when they attended the same school. In the PSD there are those who say Pires de Lima will keep Portas in check.

The new minister of Foreign Affairs, Rui Machete, is a political veteran and his comeback was a big surprise. He has been in the PSD almost from when it was founded in 1974, he was a minister various times, the last time being in 1985, as Vice Prime Minister and Minister of Defence, when the PSD was in coalition with the PS (centre left party) in the Central Bloc. At that time, Portugal was under the IMF. He supported Pedro Passos Coelho in the party’s internal struggles and represents a social-democrat who has more to do with the origins of the party than the Prime Minister’s liberalism. It remains to be seen if his age, 74, is an advantage in the Ministry of Foreign Affairs because of his experience, or a handicap because of the demands of constantly travelling and of foreign policy. However, although he is seen as close to the Americans because he was president of the Luso-American Foundation for Development (FLAD),telegrams published via Wikileaks revealed that the US ambassador did not think Machete hit the mark.

Jorge Moreira da Silva, the new minister of the Environment and Territorial Planning, was the young man who, in 1995, succeeded Pedro Passos Coelho as the leaders of the Young PSD. After being a Euro MP, he specialised in environmental areas and was appointed Programme Manager on Climate Change and Energy on the United Nations Development Programme. Therefore the portfolio had been handed to a specialist. From a political point of view, he is close to Passos, and the PSD leader has handed him the political management of the party so that he can dedicate more time to being Prime Minister. If he retains his profile, he will provide the contributory voice of common sense within the Government and help deflect any further crises and instability.

3 – Will Portugal now be politically stable until the 2015 elections?

One never knows. Politics in Portugal is volatile. Two years is an eternity. Most of the variables depend more on personal factors than political questions. Or put another way, it all depends on how Passos Coelho and Paulo Portas get on when dealing with sensitive political dossiers. The next challenges will be the much trumpeted and never- before-seen reform of the State, the 8th and 9th ‘troika’ evaluation, with Portas as negotiating spokesman, and then the difficult State Budget for 2014. Another factor to consider is: the Constitutional Court which could once again throw out the austerity measures. The Government will have to be twice as careful!

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