Portuguese Prime Minister Antonio Costa chaired an emergency cabinet meeting on Friday and was due to meet the president and address the nation after his leftist allies sided with the opposition in a vote that could undermine efforts to balance the budget.
Late on Thursday, a broad alliance of lawmakers sitting on a parliamentary committee voted to grant teachers salary increases held back over several years since 2005.
A government spokesman said Costa was due to meet President Marcelo Rebelo de Sousa at 1400 GMT, and would later deliver a televised address to the nation from his residence – although there was no indication of what he was going to say.
Losing the support of the far left Communists and Left Bloc in parliament could open a political crisis, as the Socialists, who rule in a minority, would not be able to approve laws. Portugal is due to hold a national election in October.
But Left Bloc leader Catarina Martins said in a Facebook post that “it appears there are attempts to create an environment of a political crisis. This environment is totally artificial.”
The wage rise has not yet faced full parliament, which is due to ratify it in a session on May 15. It would not impact this year’s budget.
Foreign Minister Augusto Santos Silva called the committee vote “irresponsible”, telling reporters shortly before the cabinet meeting that “we have to guarantee the conditions to govern Portugal”.
Wages for all of the country’s civil servants, including teachers, were frozen during the country’s debt crisis, a measure not reversed until last year.
With an economic recovery now gathering pace, the government has faced a wave of strikes and protests from teachers, nurses, police and prison guards in the past few months to press demands for pay hikes and better working conditions.
According to Finance Minister Mario Centeno, approving the measure could cost the country up to 800 million euros (£684.7 million) a year.
Opinion polls suggest the Socialists, whose management of the economic turnaround has been a hallmark of their four years in office, are likely to win the autumn vote but may be just short of a majority.
The government presented a plan last month for public accounts to swing to a surplus from 2020 following a deficit of 0.2 percent of GDP this year.
The additional payouts, which if approved would kick in from next year, could affect the plan to post a surplus, particularly as economic growth is expected to slow down this year and possibly next.
The government has suggested the unblocking of pay increases for teachers could be unconstitutional, and even if it were approved by parliament, the president would likely veto it or send it to the constitutional court for an evaluation.
But Ana Paula Coelho, an English teacher in Faro, said she and her colleagues were counting on the long overdue pay rises while their workload was only increasing in a “flawed education system” with lots of red tape, late meetings and extra hours.
“The highest salary does not reach 2,000 euros a month,” she said. “Yesterday they finally approved the recovery of the frozen nine years – but we still don’t know how the phasing of the payment will be.”