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Look Out Troika, Portugal Names Socialist Antonio Costa Prime Minister

Tyler Durden's picture




 

This was a bad month for Brussels and Berlin when it comes to Portuguese politics. Just days after Pedro Passos Coelho was reappointed PM by President Anibal Cavaco Silva, Socialist leader Antonio Costa cemented an alliance with the Left Bloc and the Communists on the way to overthrowing the government

The drama came on the heels of inconclusive elections held in October and sets the stage for a government that's less amenable to harsh austerity and far less troika-friendly that Passos Coelho. "While uncertainty about the composition of a new government remains, the most likely scenario involves a minority Socialist party (PS) government with political support from far-left parties. Relative to the previous government, the new government is likely to (a) be more sceptical about fiscal austerity; and (b) contain some minority elements that have been anti-Euro or anti-EU in the past," Goldman said in a note out earlier today.

As we noted earlier this month, Portugal may well honor its obligations but even so, it's hard to imagine that relations between Lisbon and Brussels will won't change materially going forward and that's bad news for Juncker and Merkel, because unlike Greece, Portugal "matters" and the country's debt level (both public and private) is quite high: 

As RBS' Alberto Gallo detailed last week, "public debt levels are high (130% of GDP), corporates are highly levered (140% of GDP) and banks have low profitability and asset quality. Q3 GDP ended a sequence of five consecutive quarters of growth – it expanded by 0.5%, the same as Q2. In what symbolises the political stalemate, the government has approved the TAP privatisation (privatisations were a key part of the incumbent government’s reform agenda) while the Socialist have called for it to be halted." 

On Tuesday, Sliva finally decided to name Costa PM.  As Reuters reports, the announcement "ends weeks of political stalemate and paves the way for the first Socialist government backed in parliament by the far left." 

As Reuters goes on to note, "the Socialists have promised to end years of harsh austerity, increase families' disposable incomes and help the poor, who suffered during Portugal's debt crisis and the bailout that ended last year."

Although it's not clear what the alternative would have been, Silva attached a number of conditions to the nomination including "written assurances from Costa that he and his leftist partners would respect Portugal's commitments to EU budget rules, something that Costa - but not his partners - had pledged to do." Some analysts are afraid the country's economic "recovery" could be derailed. 

"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," WSJ said, adding that "Costa’s administration will be the first Portuguese government supported by far-left parties in the country’s four decades of democratic rule."

The worry for the troika is that this is the first step towards an outright repudiation of Berlin's brand of fiscal rectitude. Underscoring that is Socialist lawmaker Francisco Assis who says his party will be "a hostage of a far left." 

Yes, a "hostage to the far left" and you know what that means when it comes to austerity and debt negotiations. 

Sorry Jim, looks like you missed this one:


 

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Tue, 11/24/2015 - 14:32 | 6833427 JustObserving
JustObserving's picture

US/NATO needs  Gladio II to keep leftists out of power.

One of the first duties the NSC deemed necessary was the subversion of Italian democracy...in the name of democracy, of course. Italy seemed likely to elect a leftist government in the 1948 election. To make sure Italians voted instead for the candidates Washington favored-leftover brownshirt thugs from Mussolini's party and other Nazi collaborators-millions of dollars were spent on propaganda and payoffs. It was also intimated that food aid would be cut off if the election results were inconsistent with US desires.


The US got its way in 1948 without having to resort to violence but-as was discovered in 1990- the CIA had organized a secret paramilitary army in postwar Italy, with hidden stockpiles of weapons and explosives dotting the map. Called Operation Gladio (gladius is Latin for sword), the ostensible excuse for it was laughable-the threat of a Soviet invasion. But the real purpose wasn't so funny-Operation Gladio's 15,000 troops were trained to overthrow the Italian government should it stray from the straight and narrow.


Similar secret armies were formed in France, Belgium, the Netherlands and West Germany- often directed, quite naturally, by former SS officers. They didn't just wait around for the Russians to come marching in; they assembled huge arms caches (many of which remain unaccounted for), compiled blacklists of leftists and, in France, participated in plots to assassinate President DeGaulle.


http://www.thirdworldtraveler.com/CIA%20Hits/Gladio_CIAHits.html

 

Tue, 11/24/2015 - 14:35 | 6833465 barndoor
barndoor's picture

The Troika is now in Portugal now as well?

When are these fucking Russians going to stop?!?!

Tue, 11/24/2015 - 15:02 | 6833717 knukles
knukles's picture

I couldn't care whether the guy is a Commie, a Conservative a collective farmer or a retired neurosurgeon.
As long as he'll tell Brussels and the NWO to "Go Fug'emselves", it's all good

Tue, 11/24/2015 - 15:17 | 6833838 GhostOfDiogenes
GhostOfDiogenes's picture

A famous poet of the modern era said once,

"Meet the new boss
Same as the old boss".

Which is worse?

A liberal dictatorship or a conservative one?

Tue, 11/24/2015 - 14:28 | 6833436 Soul Glow
Soul Glow's picture

Good.  Socialism.  That will fix everything.  People who work hard can pay for lazy people.  Sounds productive.

Tue, 11/24/2015 - 14:35 | 6833473 Sparehead
Sparehead's picture

Yup, austerity is the real issue, bring on more debt! That'll solve our debt problems.

Tue, 11/24/2015 - 15:10 | 6833557 Batman11
Batman11's picture

Traditionally, the Leisure Class exists at the top.

The working and middle classes toil to keep them in luxury and leisure.

 

Tue, 11/24/2015 - 17:20 | 6834625 dreadnaught
dreadnaught's picture

Q: when will The Department of War stop spending other peoples money? A: when it runs out-as socialism is what keeps them afloat-YOUR tax dollars on quadrillions of black ops/budget projects will soon run out, as Margaret Thatcher said

Tue, 11/24/2015 - 17:43 | 6834759 PrometeyBezkrilov
PrometeyBezkrilov's picture

I think people are destructed by labels and misconceptions. China is "communist" nation but they do not organize proctology exams on their flights. US is a "free" country but perverts at the airport grab you by the balls and some other perverts already prepared concentration camps. Capitalism supposedly is the way to go, but it failed the US miserably. So the conclusion is that it is not the system, but people who make it work or make it fail. The public cannot remain in a state of coma and expect that things are going to sort themselves out, no matter what the system they live in. Things are not going to sort themselves out, the crooks will.

Tue, 11/24/2015 - 18:33 | 6834965 ZD1
ZD1's picture

China is nation ruled by corrupt dictators.  They EXECUTE anyone who is opposed to the party line or who speaks out against the regime.

The US doesn't have capitalism, it has CRONY capitalism and socialism. 

Tue, 11/24/2015 - 14:33 | 6833468 Mike Masr
Tue, 11/24/2015 - 14:34 | 6833470 GoldenDonuts
GoldenDonuts's picture

Goodbye EU.  It was nice knowing you.

Tue, 11/24/2015 - 14:44 | 6833566 H. Perowne
H. Perowne's picture

". . . . missed this one." As in singular. Seriously Tyler, my sides, they hurt from laughing.

Tue, 11/24/2015 - 14:45 | 6833582 back to basics
back to basics's picture

Look out Troika, we now have a Tsipras in Portugal. Oh wait.......

Tue, 11/24/2015 - 14:49 | 6833613 HenryHall
HenryHall's picture

Who exactly (person's or persons' name(s)) represents Portugal at the EU when it gets to discuss whether or not to renew economic sanctions against Russia?

Tue, 11/24/2015 - 14:52 | 6833637 theallseeinggod
theallseeinggod's picture

congratulations Portugal

Tue, 11/24/2015 - 14:53 | 6833649 LetsGetPhysical
LetsGetPhysical's picture

THEY'RE ALL FUCKING SOCIALIST. Every last one of them.

Tue, 11/24/2015 - 15:12 | 6833806 taggaroonie
taggaroonie's picture

I don't often upvote all-caps, but what the hell.

Tue, 11/24/2015 - 14:57 | 6833678 rita
rita's picture

The last government PSD/CDS was all in to obey and comply these new PS and left coalition  we don´t know what to expect, so i´m guessing they will do as told just like the other ones! Parties are all much the same.

Tue, 11/24/2015 - 15:04 | 6833728 nocommiesworld
nocommiesworld's picture

This Costa guy is just trying to save his political ass, he lost the elections and now is aligning himself to communists and neocommunits. This isn't about the people saying no to the EU, the extreme-left parties had ± the same votes they always do it's just about the socialists lust for power, and now their are going to reverse privatizations, increase the minimum wage and give public servents some cuts of their salary, in hopes that by next year when it's probable there are new elections they have move votes

 

Tue, 11/24/2015 - 15:13 | 6833811 all-priced-in
all-priced-in's picture

Since moving left worked so well for Greece - it is no brainer that this will work other places.

 

The way they are defining austerity is totally fucked up - but giving the poor more free shit always helps get the left elected - then all they need to do is find a way to fund all the hollow promises.

 

Raise tax rates - but not tax revenue followed by borrowing until you can't borrow any more.

 

 

 

Tue, 11/24/2015 - 16:44 | 6834377 HenryHall
HenryHall's picture

>> Since moving left worked so well for Greece - it is no brainer that this will work other places.

Greece missed its chance for rapprochement and renewal with Russia. Portugal may not.

Tue, 11/24/2015 - 17:17 | 6834601 dreadnaught
dreadnaught's picture

what a dullard you are sir, The Conservatives brought the country to the brink of disaster, then Tspiras took over-this new government was NOT allowed to work-Tspiras soon got the hint when he was told that if he keeps up his 'Socailist antics', he would come home one night to find his wife and children dead in a burned out house.

Tue, 11/24/2015 - 18:40 | 6834991 ZD1
ZD1's picture

What a dullard you are bitch, there is no such thing as a conservative in Greece.

Tspiras was an elitist leftist pig who liked to shout socialist solgans on the streets and then went home to his luxury villa.

Tue, 11/24/2015 - 15:22 | 6833870 SmittyinLA
SmittyinLA's picture

Pretty much guarantees no budget cuts and more 3rd world  Muslim socialist invasion.

The EU is a Caliph.

Repeat

Tue, 11/24/2015 - 15:22 | 6833871 SmittyinLA
SmittyinLA's picture

Pretty much guarantees no budget cuts and more 3rd world  Muslim socialist invasion.

The EU is a Caliph.

Repeat

Tue, 11/24/2015 - 17:08 | 6834542 Richard Hannay
Richard Hannay's picture

Antonio Costa (my delicious country fellow) has two problems:

1 He's a Socialist

2 He's an imbecile

 

oops... sorry, he has a problem

Wed, 11/25/2015 - 05:44 | 6837010 StrikerMax
StrikerMax's picture

That's exactly the one and same problem.

Do NOT follow this link or you will be banned from the site!