Portugal’s minority Socialist government led by Prime Minister Antonio Costa barely survived a no-confidence motion from the opposition on February 20 when the vote margin was only 115-103 in the 230-seat parliament.
Portugal is facing the prospect of a general election in October. Thus far, the ruling coalition parties are in the lead in most opinion polls. The Socialist-led government, however, has faced repeated walkouts in parliament in reaction to a prolonged period of fiscal consolidation.
Lisbon has been lowering the income tax and has authorised modest wage and pension increases, while the President of the Eurogroup, Mario Centeno, says that strikes are the result of higher expectations as the economy grows.
Over the last two years, the Portuguese government has maintained a low deficit and maintained growth rates above the Eurozone’s average. Unemployment stands at 6.7%, which is a 16-year low. Portugal’s labour market is, at present, vastly outperforming the much larger economies of Italy and Spain, and is well ahead of Greece, a nation with a similar size, population, and industrial base.