Challenges for Portuguese government may not abate

Subject

Portuguese leftist government and 2016 budget.

Significance

The Socialist Party (PS) minority government led by Antonio Costa came to power in November 2015 with the parliamentary backing of the Portuguese Communist Party (PCP), which remains faithful to Marxism-Leninism, and the radical Left Bloc (BE). This unexpected and unprecedented support has led the government to be dubbed in Portugal as 'the contraption', an epithet meant to reflect the government's likely instability. However, the first few months have belied this expectation.

Impacts

• Public support for the PS has been growing in the last few months.
• The government has been able to gain trust from the EU and rating agencies while maintaining support from the BE and PCP.
• Despite its positive record so far, the government will continue facing challenges over the next months.