Portugal Socialist Costa named PM in left-wing coalition
Portuguese President Anibal Cavaco Silva has given Socialist leader Antonio Costa the chance to form a government, heading an alliance that includes far-left parties.
It is the first time since Portugal's dictatorship was overthrown in 1974 that a Socialist government has come to power propped up by Communists.
Mr Costa, 54, has promised to "turn the page on austerity".
However, he has sought to reassure EU leaders of his spending plans.
His left-wing government is the first to take power in a eurozone country since Syriza won elections in Greece in January. One of his alliance partners, Left Bloc, has close ties with Syriza.
Portugal finally left its three-year EU-IMF €78bn ($83bn; £55bn) bailout last year. But while unemployment has fallen to 12%, there are still high rates of poverty and government debt is at 130% of GDP.
Portugal's new government
- Socialists: Leader Antonio Costa, former mayor of Lisbon and minister in government of Jose Socrates
- Left Bloc (Bloco de Esquerda): Leader Catarina Martins, former actress who steered party to 10% support in election
- Communists: General Secretary Jeronimo de Sousa, first elected as MP in 1975 after fall of dictatorship
- Greens: Leader Heloisa Apolonia, lawyer
Although Mr Costa's government was the only viable option for Portugal, President Cavaco Silva insisted he agree to six key conditions (in Portuguese) before appointing him as prime minister.
Among the most significant are compliance with eurozone budget rules and guarantees on the 2016 budget as well as respect for Portugal's commitments as part of its membership of Nato.
Outgoing Prime Minister Pedro Passos Coelho's centre-right party won last month's election but failed to muster a coalition. The president initially appointed him as prime minister but he lost a vote of confidence in parliament a fortnight ago.
On the very day he brought Mr Coelho's minority government down, Antonio Costa was signing agreements with his left-wing partners.
He pledged to veer away from a mainly low-wage economy and focus on public healthcare, education and social security.
The new government is also expected to scale back the previous administration's programme of privatisation.