Even if Portugal were to ride out the storm with its government in limbo, European officials worry that failure to pass the EU-backed measures on Wednesday and Mr Sócrates’ resignation could overshadow the upcoming summit.
“If there is a fall of the Portuguese government, we’re in trouble,” said one senior European diplomat involved in economic negotiations. “How do you sell this as a credible collective response?”
When European Union leaders gather in Brussels at the end of the week to finalise a much-anticipated “grand bargain” to solve their debt crisis, the eyes of the financial markets will be focused on an unlikely place: Finland.
After months of negotiations, the Finnish government, normally one of the most pro-European Union members in the bloc, is set to hold up one of the central elements of the package, in part because it has been blindsided at home by the rise of a populist anti-euro party that is threatening to cause havoc in next month’s national elections.(...)
Without unanimity in the euro zone, the deal could fall apart. In an interview with the Financial Times, Ms Kiviniemi acknowledged that Finland was playing the unusual role of “troublemaker” in negotiations.
But, with the parliament’s Europe committee opposing the increase and the legislature dissolved ahead of the April 17 elections, her hands are tied.
“I don’t have the mandate from the parliament to increase them,” she said, noting it would have to be called back into an emergency session to approve an increase.
UPDATE“It would be very, very difficult. I would say impossible, because this topic is a very hot one.” Ms Kiviniemi is not the only one struggling with the issue.
Portugal Premier Quits After Austerity Plan Is Rejected