Portugal's President Calls for Early Elections

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MADRID -- The president of Portugal reignited political turmoil in the country on Thursday by calling for a new coalition government and early elections, rather than maintaining the administration of Prime Minister Pedro Passos Coelho, which has been strained by differences over its austerity policies.

The unexpected step by President Aníbal Cavaco Silva, made in a national television address on Wednesday evening, came after Mr. Passos Coelho presented him with a deal meant to salvage the governing center-right coalition, which nearly collapsed last week after two cabinet ministers resigned.

Presidential endorsement is required for such agreements and is typically granted as a matter of routine. It was unusual for Mr. Cavaco Silva to instead present a plan of his own. That he did so suggested a lack of confidence in the durability of Mr. Passos Coelho's coalition, and underlined how divided European leaders have become over the issue of austerity policies.

In his address, the president urged Portugal's two largest parties -- Mr. Passos Coelho's Social Democrats and the opposition Socialists -- to share power until next June and to hold a general election then, rather than leave in place the increasingly unhappy partnership between the Social Democrats and the smaller conservative Popular Party, led by Paulo Portas.

At the beginning of July, Vítor Gaspar, the finance minister who put together Portugal's current austerity program at the request of international creditors, resigned. Mr. Portas, who had clashed with Mr. Gaspar, resigned as foreign minister the next day, but Mr. Passos Coelho eventually persuaded him to stay by promoting him to deputy prime minister.

Portuguese presidents have the power to dissolve Parliament, though they rarely use it. Mr. Cavaco Silva held meetings with party leaders on Thursday to discuss the situation, and was scheduled to meet with the prime minister in the evening. Mr. Passos Coelho did not comment on the president's proposal before that meeting.

Analysts were unsure why Mr. Cavaco Silva had decided not to endorse the ruling coalition's agreement.

"He probably wants to make an impact on his legacy by presenting himself as a guarantor of political stability," Antonio Barroso, a political analyst at Teneo Intelligence, a New York-based consulting company, said in a note to its investor clients. But he said the president's proposal ''creates even more uncertainty than under a reshuffled coalition agreement." He added that any talks between the Social Democrats and Socialists over sharing power "will be extremely complicated.''

Socialist leaders have said recently that they would consider forming a coalition with the Social Democrats, but only after Mr. Passos Coelho agreed to call an early election. The Socialists were themselves forced to call an early election in June 2011 after a parliamentary standoff over Portugal's budget problems.

Despite an international bailout and a plan to make the economy more competitive, Portugal has been stuck in a recession. The tax increases and spending cuts imposed under the terms of the bailout  program have prompted  street protests and strikes.

world

This article originally appeared in The New York Times.


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