News Analysis: Portugal's new gov't enjoys favorable position, but faces challenges ahead

Source: Xinhua| 2019-10-28 00:11:13|Editor: Li Xia
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LISBON, Oct. 27 (Xinhua) -- Portuguese Prime Minister Antonio Costa and his new minority government, sworn in on Saturday, will have a more favorable position than his previous one four years ago, but may face more challenges ahead, political analysts have said.

At Saturday's inauguration ceremony, Portuguese President Marcelo Rebelo de Sousa noted that the new government will face more challenges.

"The task that awaits you is not easy. Today's Europe and the world are different, more complex, and more unpredictable," the president said, adding that the Portuguese expectations are higher, with the new government having fewer resources to meet those expectations.

How to maintain high economic growth in an unfavorable situation is a tough task for the new government, although the budgetary balance and the outstanding economic achievements in the past four years are the main factors behind the Socialist Party's (PS) victory in the national elections earlier this month, academics and political analysts told Xinhua.

Antonio Costa Pinto, political scientist and coordinating researcher at Political Sciences Institute (ICS) in Lisbon, expected the new socialist government to keep the budgetary consolidation policy.

"What we don't know is if it will be able to respond to the demands of the Left parties -- higher growth of the national health system, pension recovery, minimum wage increase," says Costa Pinto, adding that those are the areas in which lie the main challenges for the new government economic policy.

"The focus of uncertainty will, of course, be the eventual slowdown of the European economy, forcing the socialist government into a process of adjustment," he said.

According to Susana Salgado, research fellow and professor of political communication, media and politics in Social Sciences Institute in Lisbon, the new government will have to choose between budgetary balance and economic growth.

"The government will have to choose to keep the deficit low or to carry out necessary structural reforms. If the international economic environment worsens, the impact on Portugal can be serious, jeopardizing any growth targets. If, in addition, there is an increase in public investment levels, it will be very difficult to keep the deficit low rates," she said.

With no formal written agreements with the parties that supported the previous government in last legislature, there are some political challenges awaiting Costa's new government, according to analysts.

Susana Salgado said that, without a full majority, the government is dependent on temporary agreements inside the parliament to see some structural measures approved, and will come under pressure from the other parties to ensure other measures, even if those are not among its priorities.

However, Costa Pinto believes that political stability is not expected to decline as there is no alternative at the right of the political spectrum and the PS has some capacity to have its budgets approved by the left.

"At least for the first two years, the situation will be comfortable for the socialist government," he said.

On the domestic front, analysts said that the two new ministries have shown the interest of the government to solve some long-standing issues facing the country.

The new Territorial Cohesion Ministry, which will have the responsibility to manage and apply the European funds in Portugal, is regarded as a response to the development problems of the Portuguese countryside.

"The creation of this new ministry generates a lot of expectations in what will be this government response to the existing desertification problems inland and the inequalities that have been deepened by the austerity policies," said Susana Salgado.

The other "new" ministry of the Portuguese Government -- State Modernization and Public Administration Ministry -- concentrates on areas that were previously under the Finances, Presidency and Internal Administration ministries, but shows the will to communicate some issues differently.

"The announcement of a ministry in this area is a way to show that the prime minister acknowledges the existing problems and is interested in giving it some kind of answer," Susana Salgado said.