(Bloomberg) -- Portuguese Prime Minister Antonio Costa said he won’t resign as his minority Socialist government struggles to get backing in parliament for its 2022 budget proposal.
Costa, who has been premier since 2015, told parliament on Tuesday that the government will continue to try to get an agreement that would allow the budget to pass. An initial vote is scheduled for Wednesday.
If the budget is rejected, President Marcelo Rebelo de Sousa has said he’ll dissolve parliament, which would likely lead to early elections. Costa, who is halfway through a second four-year term, said on Friday that if the budget doesn’t pass in parliament and if the president then decides to call early elections, he “will respect the decision and is ready for everything.”
A survey published by Jornal de Negocios on Sept. 27 indicated 37% support for the Socialists, 12 percentage points ahead of center-right opposition party PSD.
The ruling Socialists, which hold 108 out of a total of 230 seats in parliament, need a simple majority to pass the plan.
The Left Bloc party, which has 19 seats, has said it remains available to negotiate with the government, but would vote against the budget if its proposals are rejected.
The Communists, which abstained together with some other parties last year to help the 2021 budget pass, said on Monday that they will vote against the 2022 plan. The Communists have called for an increase in the minimum wage, greater employment protection and free nursery schools for all children. PSD and other parties on the right have also said they will vote against the budget proposal.
Portugal’s economy is recovering after shrinking 8.4% in 2020 as the coronavirus pandemic hurt the country’s tourism industry and other businesses, the biggest contraction since at least 1960. For Portugal, which has the third-highest debt ratio in the euro area behind Greece and Italy, tourism represents about 15% of the economy and 9% of employment.
The government aims to narrow the budget deficit to 3.2% of gross domestic product in 2022 from an estimated 4.3% this year as growth accelerates, according to the budget proposal.
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