Portuguese Ruling Parties Eye Win But No Majority

Portugal’s right-wing coalition is projected to win an election, but no majority, after four years of austerity.

Portuguese prime minister Pedro Passos Coelho walks in Lisbon, October 2
Portuguese prime minister Pedro Passos Coelho walks in Lisbon, October 2 (PSD)

Portugal’s ruling right-wing coalition is projected to win the elections on Sunday but it could also lose its majority in parliament, leaving it at the mercy of the opposition Socialists.

Recent polls give the parties that support Prime Minister Pedro Passos Coelho up to 40 percent of the votes, down from the 50 percent they got in 2011.

But the Socialist Party, led by former Lisbon mayor António Costa, would barely improve on its last election performance. Surveys give it around 32 percent support, up from 28 percent four years ago.

Smaller parties on the left could take up to 20 percent of the votes, potentially giving Costa a governing majority. But one of those parties, the Democratic Unitarian Coalition, is so far to the left that the Socialists are unlikely to cooperate with it. The party is a mix of communists and Greens.

The Financial Times reports that the more likely scenario in the event of a hung parliament is a minority government led by Passos Coelho and reluctantly supported by the Socialists.

Although Costa has taken the right to task for enacting supposedly “excessive” austerity measures, his party hasn’t questioned the rationale for budget cuts per se. Nor would it take Portugal out of the euro to escape austerity, as some on the far left advocate.

A victory for Passos Coelho then would also represent a moral triumph for Germany’s Angela Merkel, the European Commission and others who have said that exacting fiscal discipline and tough economic reforms are the only viable means of turning round a struggling economy in the eurozone, according to the Financial Times.

In delivering his “austerity works” message, the prime minister has repeatedly pointed to Greece as evidence that antagonising international lenders is counterproductive, a warning that could find an echo in upcoming general elections in Spain and Ireland.

Portugal’s unemployment rate has come down from a 17-percent high in 2013 to 12 percent this summer — still above the European average of 9.5 percent but a far cry from Greece’s 25 percent.

The country also successfully exited it €79 billion bailout program and has seen economic growth return. Greece, by contrast, needed to apply for a third financial rescue package this year when its economy once again fell into recession.

Among the austerity measures Passos Coelho enacted were cuts in the public administration and the privatization of hospitals, the national airline and utility companies. Fees for the state-run health service were increased while the period for jobless benefits was reduced from thirty to eighteen months.

The policies allowed the right-wing government to cut the deficit in half and reduce government spending from 52 to 49 percent of economic output, a reduction roughly in line with efforts made across the eurozone.

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