Portugal ruling party falls behind in poll, tax plan scalded

Reuters News
Posted: Sep 13, 2012 12:46 PM
Portugal ruling party falls behind in poll, tax plan scalded

LISBON (Reuters) - Anger at new tax rises in Portugal gathered steam on Thursday, compounding the government's woes after a poll showed support for the ruling Social Democrats had fallen below the opposition Socialists for the first time since last year's election.

A barrage of opposition to government policy raises the stakes in Portugal's ability to ride out its deepest recession since the 1970s and enforce its austerity program under a 78-billion-euro bailout.

Broad political consensus behind austerity has so far differentiated Portugal from other euro zone strugglers like Greece, the scene of frequent unrest over austerity.

But the head of Portugal's biggest employers group launched unusually strong criticism of the center-right government's tax increase, saying the "pillar of social stability" had been shaken by the move.

"We have had the three pillars of political stability, of rigorous fulfillment of the (bailout) program and of social stability," Antonio Saraiva, head of Portugal's industry confederation, told journalists.

"This pillar of social stability has been attacked with these measures," he said, referring to last Friday's decision by the government to raise social security contributions by all workers to 18 percent from 11 percent in 2013.

Criticism of the tax hikes from unions and opposition parties grew louder this week after Portugal's lenders, the European Union and IMF, said they had agreed to scale back the country's fiscal goals under the bailout.

The Socialist party chief met President Anibal Cavaco Silva on Thursday to discuss the issue. Although the president's role is largely ceremonial, he can veto bills including the budget and also act as mediator between the government and opposition.

The poll, published in daily Correio da Manha on Thursday, showed support for the Social Democrats had fallen to 33.3 percent in September from 35.0 percent in July. Backing for the center-left Socialists rose to 35.4 percent from 30.8 percent.

Prime Minister Pedro Passos Coelho's Social Democrats, who rule in coalition with the smaller rightist CDS-PP, have suffered a fall in support since the recession deepened this year under the weight of austerity.

Support for the CDS-PP declined to 7.1 percent from 7.9 percent, the poll showed.

The survey of 600 people by the Aximage pollsters took place between September 3 and 6, before the government last Friday announced the new tax hikes for 2013.

The poll had a margin of error of 4 percentage points.

The ruling coalition has a firm majority in parliament after winning elections in June 2011, and general elections are not due for three years. But there will be regional elections in the Azores this year and a round of municipal elections in 2013.

(Reporting by Axel Bugge; Editing by Mark Heinrich)