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Leftist alliance proposal could complicate Portugal crisis talks

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(Globalpost/GlobalPost)

By Andrei Khalip

LISBON (Reuters) - Portugal's small Left Bloc party called on Tuesday for leftist groups including the main opposition Socialists to form an alliance before elections that may be called next year and which opinion polls show they could win.

The proposal could complicate efforts to end a political crisis caused by splits within the centre-right ruling coalition, and which risks derailing Portugal's planned exit next year from its 78 billion euro international bailout.

Under instructions from President Anibal Cavaco Silva, the ruling coalition is seeking a deal with the Socialists to keep the bailout on track until it expires in mid-2014, after which elections could be held a year early.

But the prospect of a leftist alliance to go to the polls and afterwards form a government is likely to reinforce the Socialists' opposition to austerity imposed under the bailout.

Joao Semedo, a Left Bloc leader, said he proposed to the Socialists and the Communist party "to open a process of discussion and approval of program bases for a leftist government ... that would put an end to austerity".

He said the president's initiative had only "instilled confusion" following a failed government reshuffle.

Socialist leaders agreed to meet the Left Bloc later on Tuesday, but did not mention any possible alliance. The party said in a statement that "dialogue between parties is essential to find solutions to the serious problems that the country is going through."

The Left Bloc and the Communists want a debt restructuring for Portugal, while the Socialists want bailout goals and bond maturities renegotiated but no debt write-off.

Analysts say a left-wing government would be nearly impossible to secure due to historic differences between the moderate Socialists and the smaller leftist parties, which have gained ground in opinion polls but remain a marginal force.

The Socialists lead in opinion polls, but not by enough to secure a full majority in the 230-seat parliament, although polls suggest the three leftist parties together could do so.

The Left Bloc currently holds just 8 parliamentary seats and the Communists 14, compared to Socialists' 74.

The ruling alliance of the centre-right Social Democrats and rightist CDS-PP holds a comfortable majority of 132 seats.

(Reporting by Andrei Khalip; Editing by Catherine Evans)

http://www.globalpost.com/dispatch/news/thomson-reuters/130716/leftist-alliance-proposal-could-complicate-portugal-crisis-talk