Portugal’s main conservative opposition parties voted against a bill that would have given full retroactive pay rises to teachers, and that made Prime Minister António Costa threaten to resign.
Despite backing a parliamentary committee’s decision to give teachers payouts as compensation for salary freezes during the country’s debt crisis, the Social Democrats (PSD) and the People’s Party (CDS), together with the smaller Socialist Party, rejected the final text of the bill in a vote Friday.
PSD and CDS had teamed up with far-left parties to leave the Socialists isolated in resisting the teachers’ demands. They had voted in favor of a full refund of teachers’ pay dating back almost a decade, but made a U-turn after Costa threatened to resign if the bill passed.
After a long emergency meeting with key ministers, and talks with President Marcelo Rebelo de Sousa last week, Costa said approval of the payouts would “force the government to resign,” and would constitute “an irreparable breach” with the country’s economic plans.
The bill, the prime minister warned, would create an additional cost of at least €340 million between this year and next, a figure that could have risen massively if the retroactive payments were also given to other public sector workers who experienced pay freezes. Finance Minister Mário Centeno said approving the measure could cost the country between €600 million and €800 million.
Fearing an early general election where Costa could stand as the defender of fiscal discipline, PSD and CDS backed away from their initial positions and proposed budgetary safeguards in the final text, to ensure that any money paid out would not adversely affect the country’s economy.
The Left Bloc, which together with the Communist Party (PCP) supports the Socialist government, had unexpectedly voted in favor of the bill at committee stage. In the final vote, both leftist parties refused to back the budgetary safeguards proposed by the conservative parties and voted for the full amount to be returned to teachers from the salary freezes in 2005 to 2007 and from 2011 to 2017.
Addressing the nation on Friday, Costa said the vote was “a victory for responsibility.”
“We went to the limit of what was possible,” said the prime minister. “And we went to a point where we can replicate the solution to other professionals. The government not only did not do theater but spoke the truth,” he added.
On Thursday at a summit of EU leaders in Romania, Costa said: “If everybody would vote as they had announced they would vote,” the country “will have avoided a budget crisis that would seriously jeopardize its international credibility.”