The ongoing political turmoil in Portugal has shaken stock markets in recent days on fears the country will have to hold new elections. But the country's former Prime Minister Pedro Santana Lopes has told CNBC that new polls won't change anything.
Two key ministers have resigned from the nation's coalition government this week and the leader of the opposition Socialist Party has called for fresh elections and said the current government had lost the confidence of the people because of its harsh austerity measures.
But, Santana Lopes, who led the Social Democratic Party in power between 2004 and 2005, told CNBC on Thursday that new elections won't achieve much.
"The problem in Portugal is that people feel that even with a new government, with a Socialist government, the policies would not change a lot," he said. "The Troika is very firm about the necessity of cutting the state expenses and there is a lot of work to do. That's the problem now in Portugal."
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Portugal's current coalition government is led by the center-right Social Democratic Party, with the CDS-PP (The Democratic and Social Centre – People's Party) as its junior partner.
Finance minister, Vitor Gaspar, who has implemented unpopular austerity measures as part of a 78 billion euro ($101 billion) EU-IMF bailout, stepped down on Monday. He was promptly replaced by fellow Social Democrat Maria Luís Albuquerque, the country's treasury secretary.
On Tuesday, Portugal's Foreign Minister Paulo Portas from the CDS-PP, also announced his resignation. That put the future of the government in jeopardy because Portas leads the CDS-PP, the junior partner in the governing coalition. According to media reports on Wednesday, at least two other government ministers from the CDS-PP were also ready to resign.
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Prime Minister Pedro Passos Coelho and Paulo Portas met last night with a "very constructive meeting", according to Dow Jones newswires. The two will talk again on Thursday morning, according to Santana Lopes, followed by Passos Coelho meeting with the President Thursday afternoon to formulate a new coalition agreement to reinforce the partnership.
"And so there is still a chance that the government will keep going on and the elections can be avoided," Santana Lopes said.
But, Manuel Pinho, former Portuguese minister for the economy who stood as an independent, told CNBC that the only way to get a stable solution in Portugal is to hold new elections.
"It looks like a soap opera, it's very irresponsible behavior by the two parties of the coalition," he said.