Portuguese may reelect austerity-minded, center-right government

Reuters News
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Posted: Oct 03, 2015 8:07 PM

By Axel Bugge

LISBON (Reuters) - The Portuguese could reelect their center-right government in a general election on Sunday, although it may fall short of winning an absolute majority, bringing less political stability after years of austerity and hardship under a debt crisis.

The election is the first since the Iberian country of 10 million exited a bailout last year. Yet, despite deep spending cuts and the biggest tax hikes in living memory, polls indicate the Portuguese will stick with the government that guided them through the crisis and exited the bailout by international lenders.

The latest polls, released on Friday, gave Prime Minister Pedro Passos Coelho's ruling coalition a lead of between five and 12 points over center-left Socialist opponent Antonio Costa.

But if Passos Coelho fails to pick up more than the around 38 percent that he has polled in recent days, he will fall short of an absolute majority in the 230-seat parliament, leading to a potentially unstable minority government. In the 2011 election his coalition won 50 percent of the vote, ensuring a majority.

There was no campaigning on Saturday nor statements by the candidates, in keeping with a law which sets aside the day before elections as a day of reflection.

Costa had about 33 percent support in the latest polls, making his chances of winning slimmer even though some analysts do not rule out a last-minute upset for either side.

Uncertainty about the outcome is higher still because up to 15 percent of voters are still undecided and there could be a very high abstention rate.

Adelino Maltez, a political analyst at the Lisbon Technical University, said "there is a possibility of confusion on Sunday night," if there is a very close result that gives no strong victory to any side.

If there is a close outcome, it could make the process of creating a stable government difficult, potentially upsetting the consolidation of the country's return to growth after the pain of the debt crisis that led to a three year-recession.

The economy started growing again last year and growth is accelerating this year. Passos Coelho says that only with his stable government can the economy pick up more momentum and investment thanks to widening confidence.

Costa, the former mayor of Lisbon, has promised to ease back on austerity and deliver more disposable income back to families. He urged everyone to vote.

"It is fundamental that every one of us does not waste the opportunity to finally, after four years, use our vote to change the government," Costa said at his last campaign event.

But polls have swung in the government's favor in the last few weeks despite Costa's relentless attacks on the unpopular austerity introduced by the government in the past few years.

A victory for the center-right government goes against the trend seen in other southern European countries, like Spain and Greece, which have tended to punish austerity-minded governments in the past few years.

Still, even if Costa loses, the political hue of the country could switch to the left as the government may win but parliament could have a majority of leftwing members if Socialists and other, smaller leftist parties are included. That could make it hard for a minority center-right government to pass policies.

Minority government has a dismal history in Portugal. None has survived through its full term since the country returned to democracy in 1974. The last Socialist minority government collapsed in 2011 after having to request the bailout.

(Additional reporting by Daniel Alvarenga; Editing by James Dalgleish)