ML-Implode News - Germany loses key ally in Portugal as austerity regime crumbles

Portugal's Left-wing alliance won a majority in the country's parliament last month but was initially rebuffed by President Anibal Cavaco Silva, who insisted on re-appointing a conservative government even though it had lost its working majority, and even though the political centre of gravity in the country has shifted markedly to the Left, and austerity fatigue is palpable.
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As expected, the Communists have agreed to drop their demands for euro exit and a return to the escudo, while the Left Bloc has toned down its eurosceptic language and will no longer push for debt relief. Mr Costa has pledged to abide by EU rules, but the coalition's spending ambitions are ultimately incompatible with the Fiscal Compact, and go against the grain of market reforms.
... There would then be an emerging "Latin bloc" with the heft to confront Germany and push for a fundamental overhaul of EMU economic strategy. At the very least, the political chemistry of the eurozone would change beyond recognition.

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Germany loses key ally in Portugal as austerity regime crumbles