http://www.wsj.com/articles/socialist-leader-antonio-costa-is-named-as-portugals-prime-minister-1448370564
Socialist Leader António Costa Is Named as Portugal’s Prime Minister Portugal becomes the second eurozone country this year to rebel against EU belt-tightening rules Portugal's Socialist party leader António Costa, left, meets Tuesday with President Cavaco Silva at Belem Palace in Lisbon. PHOTO:REUTERS By PATRICIA KOWSMANN and MATT MOFFETT Updated Nov. 24, 2015 8:45 a.m. ET LISBON -- Portugal’s president on Tuesday appointed anti-austerity Socialist leaderAntónio Costa as prime minister in a move that ends weeks of political turmoil but opens the door to a period of economic uncertainty. The ascent of 54-year-old Mr. Costa, the former mayor of Lisbon, makes Portugal the second eurozone country this year after Greece to rebel against a belt-tightening recipe imposed on troubled Southern European economies by the European Union’s executive arm. Greece’s rebellion, which started with the election of far-left Syriza party in January, has been short-lived, with the government now imposing austerity measures to meet the terms of its latest EU bailout. Mr. Costa, who has formed a parliamentary alliance with three euroskeptic far-left parties, will also face challenges making good on his pledges to increase public wages and unfreeze pensions. Such was the concern of the Portuguese political establishment over the proposals that President Aníbal Cavaco Silva on Monday insisted that Mr. Costa adhere to six conditions, including maintaining a tight budget and strong banking system, before he named him as prime minister. ‘A true coup d’état’ -- Former Portugal Finance Minister Manuela Ferreira Leite Mr. Costa’s appointment comes weeks after Oct. 4 national elections in which the center-right coalition of incumbent Prime Minister Pedro Passos Coelho won the most seats in parliament, but lost its majority there. Mr. Cavaco Silva, who once headed Mr. Passos Coelho’s Social Democratic Party, reappointed the prime minister, but his government collapsed 11 days later as its program was voted down in parliament by the center-left Socialists and the three leftist parties. On Tuesday morning, Mr. Cavaco Silva met Mr. Costa for the second time in two days. After the meeting, the president issued a terse statement in which he said he taken “due note” of the answers Mr. Costa had provided to his six governing conditions, and had decided to appoint him prime minister. Mr. Costa’s administration will be the first Portuguese government supported by far-left parties in the country’s four decades of democratic rule. It results from weeks of negotiations between Mr. Costa and the leaders of the Communist, Green and Left Bloc parties. Mr. Costa likened the process to “tearing down the last remains of a Berlin Wall.” RELATED Bomb Explodes in Central Athens, No Casualties (Nov. 24) Portugal’s President Asks Socialist Leader for Pledge on Budget, Banking System (Nov. 23) EU Warns Four Countries on 2016 Budget Plans (Nov. 17) Greece Reaches Deal on Next Portion of Bailout Aid (Nov. 17) Portuguese Politics Test Investors Nerves (Nov. 13) Mr. Costa’s ambitious political deal-making has surprised few close to him. A lawyer who is the son of a Goa-descendent poet and Communist militant, Mr. Costa has shown a penchant for creative gambits throughout his decadeslong political career. In 1993, when he ran for mayor of a small town, he organized a race between a red Ferrari and a donkey through traffic-clogged streets to show the region needed a metro line. The donkey won, although Mr. Costa lost to the Communists by a small margin. Mr. Costa went on hold three ministry posts in Socialist governments, including head of internal affairs under former Prime Minister José Sócrates between 2005 and 2007, and to a successful run for mayor of Lisbon in 2007. The just-named prime minister, who was elected for a second term as Lisbon’s mayor in 2013, took over the Socialist leadership last year following an internal power fight with the then President António José Seguro. After the Oct. 4 vote, Mr. Costa seemed set to quit. In a speech, he said he wouldn’t stand on the ruling coalition’s way unless other leftist parties in parliament agreed to form a majority behind the Socialists’ own pro-EU program. Such a pact seemed a long shot during the campaign. Left leaders criticized the Socialists for using anti-austerity rhetoric while ignoring the need for a restructuring of the country’s high debt. Mr. Costa, meanwhile, accused the far-left of having “fantasies of nationalization.” But the Communists and the Left Bloc were eager to end Mr. Passos Coelho’s government and that made them unusually open toward an agreement, political analysts say. João Galamba, vice president of the Socialist parliamentary group, said his party made clear that others would have to accept working off the budget spreadsheet drawn up by the Socialists. Despite his differences with the policies advocated in Brussels and Berlin, Mr. Costa has offered assurances that he is committed to keeping the budget deficit below 3% of gross domestic product, as required by EU rules. “It surprised us that they accepted, given this had never happened in 40 years,” said Mr. Galamba. Not everyone is so sure that Mr. Costa’s alliance is founded on solid political ground, however. Francisco Assis, a Socialist lawmaker, warned that his party will be hostage of a far left that has little in common with the center-left. Manuela Ferreira Leite, a former finance minister and member of Mr. Passos Coelho’s party, called the Socialists’ move “a true coup d’état.” The conservative Mr. Cavaco Silva also has sharply criticized the pro-European Socialists for seeking an agreement with parties that question EU fiscal restraints, oppose Portugal’s membership in the North Atlantic Treaty Organization and are willing to take Portugal out of the eurozone. Still, he was left with little option but to make Mr. Costa prime minister. The other option would have been to leave Mr. Passos Coelho’s government in place, but without any power to pass significant legislation, until elections could be held no earlier than June. Write to Patricia Kowsmann at patricia.kowsm...@wsj.com and Matt Moffett atmatthew.moff...@wsj.com