Portugal's next presidential election is fast approaching, at a time when the government is anything but stable. According to the polls, center-right candidate Marcelo Rebelo de Sousa is a shoo-in to win the Jan. 24 vote, already 36 points ahead of his closest rival. If the polls are correct, de Sousa will win the election in the first round, but if he garners less than 50 percent of the vote, he will face off against the second-place candidate in a second round on Feb. 14. If that happens, the race would likely narrow considerably because de Sousa's many rivals are mostly scattered throughout the political left, giving a single leftist contender a good chance of uniting their votes into one bloc.

In Portugal, the presidency is a somewhat ceremonial position because it does not carry any legislative power. It does, however, play an important role when the country's elected government is in question since the president holds the deciding power over its formation. This power was apparent in the wake of Portugal's legislative elections on Oct. 4, 2015, when center-right President Anibal Cavaco da Silva was given the choice to either empower the center-right coalition, which had won the most votes but held no clear majority, or to support a coalition of leftist parties that had put aside their long-standing differences to proffer themselves as a collective solution. Initially, da Silva threw his weight behind the center-right coalition, opening himself up to accusations of bias in the process. But eventually he admitted defeat, giving the leftist coalition a chance to rule in late November 2015 once its center-right predecessor had been ousted.

Since then, the leftist coalition has had an eventful two months in power and has managed to make a number of enemies outside the country in a short amount of time. The first major controversy came as a result of a banking sector decision made by the Portuguese government at the end of 2015. The previous administration had managed the 2014 failure of Banco Espirito Santo, one of Portugal's biggest banks, by following the now-standard method of splitting it into a "good" bank containing all the solvent loans and a "bad" bank for all the nonperforming loans. As a result, investors could safely put money into the good bank knowing that the risky loans had been largely removed.

But in December, upon discovering that the good bank still contained bad loans, Portugal's new leftist government transferred those losses to the bad bank in a way that hurt mostly foreign investors, rather than their Portuguese counterparts. Though the coalition was hoping to solve the good bank's problem before new banking regulations took hold Jan. 1, the move created an issue in financial markets by appearing to violate the rule of pari passu, which stipulates that all investors must be treated equally. In a worrying development for the rest of Europe, investors are now threatening to charge a premium for investing in bonds across the Continent, since Portugal's actions revealed higher risks than were previously apparent.

Another problem has arisen surrounding Portugal's budget. The issue began as an internal dispute between the leftist parties within the ruling coalition. The center-left Socialists, the far-left Communists and the Left Bloc all agree that the austerity program of the previous center-right government cut spending too far. But they are divided as to what extent those policies should be reversed. The pro-Europe Socialists advocate at least partially adhering to the European Union's spending targets in an effort to appease Brussels. But some of their more Euroskeptic coalition partners would prefer to implement an expansive spending program to reduce the hardship that the Portuguese people have felt in the years of the financial crisis. Consequently, the draft 2016 budget that Portugal presented to the European Commission the week of Jan. 18 fell well outside the spending targets the previous administration agreed to adhere to.

Lisbon and Brussels will likely enter into lengthy negotiations to try to find a compromise, but any upticks in spending — and in turn, in budget deficits — will add to Portugal's total debt, which is already the third highest in Europe at 130 percent of the country's gross domestic product. While the European Central Bank's quantitative easing program is helping to reduce anxiety in the markets about Portugal's situation, Portuguese bond yields have nevertheless risen over the past two months, reflecting uncertainty in the market.

The Portuguese Constitution dictates that new elections cannot be held until at least six months after the original vote. This rule has partly insulated the current government from the threat of collapse, since every political party is aware that new elections cannot yet be held in an effort to improve their positions. But this uneasy calm expires in April, and the ruling coalition is made up of members with very different views and a history of conflict with one another. With its weak foundations already being put to the test by tension with Brussels and mistrust within the markets, the fragile coalition will be increasingly likely to collapse as April draws near, making new legislative elections a strong possibility as well. Even if the government manages to hold itself together, the country's new president — whoever they may be — could theoretically dissolve the parliament and call for new elections, should they deem it necessary. Therefore, regardless of who wins the Jan. 24 presidential election, Portugal's next leader will likely have to cope with new legislative elections and another fragmented government soon after taking office, once again leaving the president with some difficult decisions to make.