LISBON, Portugal – History has returned to haunt Portugal, with a constitutional amendment adopted after a military coup more than 30 years ago holding the eurozone country in a tense political limbo that threatens to rekindle its financial troubles.
Article 172 of the Portuguese Constitution, which says the president cannot call an election for six months after the last ballot, aimed to help ensure stability after a cascade of eight governments in six years following the 1974 Carnation Revolution. Now, it is helping keep Portugal from solving its political crisis in one fell swoop since the center-right government's collapse last week at the hands of anti-austerity lawmakers.
The head of state is holding consultations on how to undo the political deadlock, meeting with leading economists Thursday — a day before party leaders were to visit his pink riverside palace once more.
A general election last month pitched the country into uncertainty and has threatened to reawaken investor fears about its commitment to fiscal discipline in the wake of its recent debt crisis. Portugal only emerged from its 78 billion-euro ($83.5 billion) bailout program last year and remains burdened by debts.
The center-right government captured most votes in an Oct. 4 general election, but it was outnumbered by anti-austerity lawmakers in Parliament who voted it out after just 11 days in office. Those lawmakers, led by Socialist Party chief Antonio Costa with support from the Communist Party and radical Left Bloc, are pressuring the country's president to let them take power.
After witnessing Greece's turmoil following the election of the radical left party, some in Europe are deeply wary of such a development, though Costa vows to abide by Portugal's international commitments to rein in debts and reform the economy.
Portugal's President Anibal Cavaco Silva is hesitating over allowing in the leftist alliance, fearing that long-standing bad blood between the three parties and their pledge to "turn the page" on austerity will derail the fragile economic recovery.
One practical — and obvious — solution would be to call another election and let voters choose the way forward.
But that avenue is blocked because the 1982 amendment bars the dissolution of Parliament until April. Outgoing Prime Minister Pedro Passos Coelho, who oversaw cutbacks, tax hikes and labor reforms over four years, this week demanded a change to the Constitution to allow a snap election. Costa said no.
Back in the 1980s, after the uprising that ousted a dictatorship established by Antonio Salazar in the 1930s, the amendment fed a craving for stability. Presidential meddling in the affairs of the government and Parliament was identified as a big part of the problem. The amendment clipped the president's wings, leaving the current head of state little room for maneuver.
"It's a reasonable rule," Joao Cesar das Neves, a political scientist at Lisbon's Catholic University, said of the 1982 amendment. Constantly changing government is "unacceptable," he said.
Many share that view. Joao Paulo, a Lisbon book store assistant, griped about the president's hesitation. "The Constitution says what it says for a reason. There are other ways of sorting things out," he said. "I don't know why we've been waiting so long."
The head of state is mulling two possible options: let in Costa's leftist alliance despite the fears of lax spending, or install a caretaker government which would not have full power over wayward public finances.
Meanwhile, threats lurk.
Analysts at Oxford Economics note that "large vulnerabilities" remain in Portugal. Its bonds are eligible for purchase under the European Central Bank's stimulus program, but that could change if they are downgraded amid the uncertainty. In that case, the country's borrowing costs could spike.
There are also concerns about the banks, the need for deeper reform and debt. New figures on Thursday showed government debt rose to 130.6 percent of GDP in the third quarter from 128.7 percent in the previous quarter.
The advisory company concluded that "while the latest political instability does not mean that Portugal is following in Greece's footsteps, it certainly remains in a vulnerable position."