MEMORANDUM FOR THE PRESIDENT
SUBJECT: hift to the Leftortugal and Cabinet. Shuffle
The sharp turn to the leftortugal since the abortive coup on Marchas institutionalized by the Immediate formatter of the Revolutionary Council. In its first moves theomposed offficers of the Armed Forcesn rapid-fire successionabinet shuffle, moved to nationalize the nation's banks and Insurance companies, to proscribe three political parties and to postpone the constituent assenhly election from April o
With the formation of the Revolutionary Council an junta, which had served as Portugal's highest policy-making body, wit abolished, it was the Armed Forces Movement's coordinating committee. Fourteen officers from these two bodies were Incorporated Into the new council, which also Includes Prime Minister Goncalves and the Deputy Commander of Portugal's Internal security force General Otelo Cnrvalho. Both those men are described as susceptible to communist influence. Eight lower ranking officers were also appointed to the council. The Revolutionary Council has both executive and legislative powers and Is chaired by President Costa Gomes who must sign all legislation.
Prime Minister Goncalves was authorized by the Revolutionary Council to reorganize his cabinet to bring it into line with the new political reality. Goncalves has nade It clear that members of the Portuguese Democraticomnunist front group, will be included In the new cabinet. Rumors In Lisbon also suggest that the center-left Popular Democraticresently serving in the governing coalition with the Socialist and Communist parties as well as theay be excluded from the new government. Ihere have also been persistent rumors that Foreign Minister Mario Soaros, leader of the Socialist Party, would he moved to minister without portfolio.
The cabinet shuffle is now expected within the next few days, but the delay of nearly two weeks suggests that Goncalves Is having difficulty finding suitable candidates or has run into opposition to his proposed changes.
The two moderate parties In the presenteanwhile, are beginning to show some determination to hold their ground. Mario Soares publicly questioned Goncalves1 intention to bring the Portuguese Democratic Movement into the government and said that cabinet changes just prior to the election were inopportune. Soares also said he hoped to continue to serve as foreign minister.
The Popular Democratic Party, on the other hand, has sought to outflank the leftists by closely identifying itself with Movement policies. It was the first party to denounce the coup attempt last week, and It quickly acclaimed the bank nationalization scheme.
idely expected political move, the council banned two far left parties and the moderate rightist Christian Democratic Party until after the election. Groups on the extreme left have been responsible for the political violence in recent weeks,eading Christian Democrat is alleged to have been involved in
the coup attempt.
Itignificant that the council did not ban the Social Democratiche Christian Democrats' election coalition partner. The Social Democratic Center has broad appeal among conservatives and servesuffer on theht for the Popular Democratic Party, which feels itself threatened by leftists intent on tagging it with the "fascist" label. These two parties together could still do well in any legitimate election in April, although both have suffered serious organizational disruptionesult of recent leftist attacks.Original document.