Portuguese Elect Right-Wing Government

Portugal’s opposition unseats the ruling Socialist Party.

Portugal’s opposition Social Democrats unseated the governing Socialist Party with a resounding parliamentary victory on Sunday, giving the country’s political right a strong mandate for implementing necessary austerity measures.

With approximately 80 percent of the votes counted, the Social Democrats had won nearly 40 percent of the votes compared with 28 percent for the Socialists. The Popular Party, with which the next prime minister, Pedro Passos Coelho, is likely to govern, had 12 percent of the vote.

Socialist leader José Sócrates immediately resigned as head of his party. He had resigned as prime minister two months earlier when parliament failed to approve his austerity plans which were designed to avert a European bailout.

Portugal was forced to request financial support from its fellow eurozone member states and the International Monetary Fund in April. In return for some €78 billion in aid, the country will have to enact deep spending cuts.

Passos Coelho, a former businessman with little experience in national politics, may be able to foment a coalition quickly but will be hard pressed to meet the deadlines set out for implementing the terms of his country’s rescue package — a three year program that includes spending cuts, tax increases and economic reforms.

With unemployment hovering near 10 percent and almost 20 percent of Portuguese living below the official poverty line, the South European country is in dire need of reform. Its highly inefficient public sector, accounting for nearly half of the economy, has undermined overall competitiveness but neither of the main political factions previously demonstrated a willingness to seriously cut spending. Indeed, the victors of Sunday’s election were opposed to cuts in social security spending and unemployment compensation earlier this year.

The prospects for a recovery are much bleaker in Portugal’s case than in the rest of Europe. Its economy could contract by up to 2 percent both this year and next.

The socialists’ defeat in Portugal leaves just five left-wing governments unseated among the 27 nations of the European Union — Austria, Greece, Cyprus, Slovenia and Spain. The latter is expected to move into the right-wing camp after general elections early next year.