Almost three weeks after elections were held in Portugal with no clear winner, a government had appeared to be taking shape on Thursday. The president reappointed Pedro Passos Coelho of the Social Democratic Party as prime minister, tasking him with managing a workable minority coalition after the government lost its majority mandate.

Yet the situation has grown more precarious after an all-night meeting among the leadership of the Socialist Party, the country's largest opposition group.

The party announced on Friday that it refuses to guarantee the formation of a center-right government and demands its members of parliament to "reject any government program that essentially upholds the policies of the previous legislature."

No resolution in sight

Scoring only a few points behind the center-right Portugal Forward coalition, the Socialists have retained the mathematical possibility of rallying the left into a majority coalition, and are now threatening to pursue that.

Socialist Party leader Antonio Costa stated after the meeting: "It is incomprehensible to name a prime minister for whom the president knows in advance there will no majority in parliament."

President Anibal Cavaco Silva, a conservative, initially hoped that the Socialist Party would enter into coalition with the center-right after the inconclusive elections. "I am deeply sorry that, at a time when we need to consolidate growth and job creation...circumstantial interests are given priority over the national interest," he lamented on Thursday.

Portuguese media speculate that new elections are likely to be called next year after a majority in parliament forces the government to step down.

No minority administration has lasted in Portugal since the overthrow of Antonio Salazar's dictatorship in 1974.

Austerity and uncertainty

This latest development highlights the deepening division in Portugal over whether to stay its EU-imposed austerity course - a friction playing out elsewhere in Europe from Greece to Ireland to neighboring Spain.

Portugal has struggled under measures seeking to curb its economic instability after soaring debt necessitated a bailout package in 2011. Spending cuts and tax increases led to protests and caused the prime minister's popularity to drop.

Advocates for upholding the measures have pointed to a calmed economy and diminishing unemployment rate, while critics point to growing inequality and too-fragile growth.

Seeking to stake a middle ground, the Socialist Party pledged on Friday to form a "stable and durable" alternative government. It promised "integral respect" for the country's international commitments, notably its European ones."

A left coalition would, however, involve parties that have staked staunchly anti-austerity positions, including the Left Bloc, often referred to as "Portugal's Syriza." The Portuguese Communist and Green parties would be included as well.

Citing the European People's Party's (EPP) involvement in the country's elections, the left-leaning Portuguese newspaper Publico claimed Friday that the EPP is growing "nervous" about the country's anti-establishment surge. Publico spoke of fear that the situation will replay itself in Spain, whose elections are slated for December, also with a strong anti-austerity movement and no clear majority in sight.

"This would be the first time in Portugal's democratic history that the party which won the elections does not govern," Spanish Prime Minister Mariano Rajoy remarked Thursday at an EPP congress in Madrid.

jtm/rc (AFP, dpa)