By Victoria Waldersee
(Reuters) – Portugal’s first budget with a surplus in almost half a century is on course to pass its first reading on Friday after the Communist Party and animal rights party PAN said they would abstain in the vote on the government’s 2020 spending plans.
The ruling Socialists increased their parliamentary seats to 108 in an October election, short of a majority. They decided against seeking a formal alliance in the 230-seat house, instead choosing to govern as a minority and negotiate with other parties on a case-by-case basis.
Their approach faces its first major test this Friday, when Prime Minister Antonio Costa will attempt to pass the first budget surplus in Portugal’s democratic history, which began in 1975.
The biggest opposition party, PSD, already said its 79 representatives would vote against the budget, along with two minor right-leaning parties with a total of six seats, CDS and Iniciativa Liberal.
But on Wednesday, the Communist Party, with 10 seats, and animal rights party PAN, with four, announced they would abstain. PEV, an environmentalist party allied with the Communists, is likely to follow their lead.
Their abstentions mean the maximum number of possible counter-votes is 106 – even if the parties who have not yet announced their position vote against the government – which Costa’s 108 representatives will beat.
Passing the budget would represent a significant win for Costa and finance minister Mario Centeno, who have made restoring Portugal’s fiscal credibility a priority.
Should the budget pass Friday’s hearing, it will be debated measure by measure in parliamentary committees before a final vote on Feb. 6.
Centeno has come under fire from left-wing parties for putting a restoration of fiscal credibility ahead of much-needed public investment.
Undeterred, the finance minister said in a hearing on the budget on Monday: “Those who want to challenge the path of responsibility need only say which expenses they would cut or which taxes they would increase. The stability and trust of the Portuguese cannot be sacrificed for political gain.”
(Reporting by Sergio Goncalves and Victoria Waldersee; Editing by Pravin Char)