Original post: As expected, the Portuguese opposition voted down the government’s austerity plan.President Jose Socrates has previously indicated that he would step down in this event, but it hasn’t been announced yet.
The key thing to bear in mind is that this wasn’t necessarily a rejection of austerity per se. It was largely a political move (bear in mind that the opposition in Portugal is conservative, so inclined to be pro-austerity.
An observer sends us three options for the government now:
1: refuse + set new elections = the Gov would keep all it’s powers until new Gov.
2: accept + set new elections = the Gov would have limited powers,
could do only the strictly necessary,
and would be under strong vigilance from the President and the Parliament.
In this Option, the Gov. could NOT ask for external Financial help.
It would need President and parliament approval. (*)
3rd option today: Although the PM had already said that he will resign after the failure in vote today, no one in Portugal would be surprised if he would not resign Today. (**)
We’ll find out soon enough. Socrates is due to address the nation tonight.
Update: And President Socrates has just resigned.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.