Portuguese president holds talks as Socialists eye new coalition

Portuguese President Marcelo Rebelo de Sousa began talks with party leaders on Tuesday as the country’s Socialist party weighed up alliances to form a stable majority government.

The party of incumbent Prime Minister Antonio Costa strengthened its position in parliament in Sunday’s polls, winning 106 seats in the 230-seat assembly, up from 86 seats but still 10 shy of an outright majority.

Costa, who campaigned on a promise to boost disposable income while protecting public finances, will meet Rebelo de Sousa at 8pm (1900 GMT).

The president is expected to charge Costa with forming a new government.

Rebelo de Sousa met the leaders of smaller parties earlier in the day.

The election result is still incomplete as four seats must be attributed according to votes cast abroad, which have yet to be counted.

Costa, the former mayor of Lisbon, has said he aims to “renew” his alliance with the two hard-left parties that propped up his government during the past four years — the Left Bloc and the Communists.

But it remains to be seen what these two formations will demand in exchange for their support.

The Left Bloc won 19 seats — the same number as in the 2015 election — while the Communists took 12, down from 17.

The election result means Costa only needs the support of one of them to reach a majority.

Costa also has two other possible allies — the People Animals Nature party (PAN) which had just one lawmaker in the assembly and now has four, and upstart eco-socialist party LIVRE (free), which entered parliament for the first time with a single seat.

Another option for Costa would be to forgo a formal alliance with other parties and negotiate support to pass legislation on a case-by-case basis.

Costa will open formal talks on Wednesday with potential partners, according to local reports.

Under Costa’s watch the country’s budget deficit fell to nearly zero, the lowest level since Portugal returned to democracy in 1974.