Socialists tipped to stay in power as Portugal votes

Portuguese Prime Minister and Socialist Party leader Antonio Costa 

Portugal held a general election yesterday, with the center-left Socialist Party widely expected to collect most votes and stay in power for another four years.

Socialist Prime Minister Antonio Costa has overseen a strong economic recovery, with growth climbing from 0.2% in 2014 to 2.1% in 2018 and unemployment dropping by around half, to 6%, over its term.

Under Finance Minister Mario Centeno, who also chairs the meetings of finance ministers from the 19 European nations that used the shared euro currency, they have also started straightening out Portugal’s ill-managed public finances. The budget deficit — long a torment for Portugal as governments routinely overspent — is now close to zero.

The main opposition Social Democrats are still tainted by the deep cutbacks and three-year recession that ended in 2014, when the center-right party was in power. Party leader Rui Rio, an economist, has also struggled to silence his critics since he took over in 2018.

The party that wins the most seats in the 230-seat Republican Assembly, the parliament, typically is asked to form a new government and appoint a prime minister to lead the country. The country’s president is mostly a figurehead.

Portugal has not seen a surge of populist or nationalist parties like some other European countries.

Recent opinion polls have indicated the Socialist Party will fall short of a majority in parliament. That means it may have to negotiate alliances with other left-of-center parties, as they did in their last term with the Portuguese Communist Party and the radical Left Bloc, to pass legislation.

The conservative Christian Democratic Party and the People-Animals-Nature Party are also expected to win seats.

Portuguese President Marcelo Rebelo de Sousa has appealed for a high turnout, saying that Portugal faces a series of major challenges in coming years, including the United Kingdom’s impending departure from the European Union. The U.K. is one of Portugal’s main export markets.

“The next four years will be decisive for Portugal,” Rebelo de Sousa told the nation on Saturday evening.

Those challenges include climate change, as droughts ravage the southern half of the country, and an aging population that threatens the financing of the welfare system. The EU says at current fertility rates, the number of Portuguese will decline from 10.3 million this year to 6.6 million in 2100.

The ballot is open to around 10.8 million eligible voters, including many Portuguese who are living abroad.

Costa, the Socialist leader, reversed some of the previous Social Democratic government’s unpopular austerity measures. He restored four public holidays and slashed the sales tax on restaurant meals to 13% from 23%.

Critics, however, note that his government benefited from the unpopular austerity measures put in place by the previous Social Democratic government.

The low budget deficit has also come at a cost: income taxes for all except the lowest earners remain at record high levels and public services have been starved of cash, with soaring waiting times for patients in the national health service. On top of that, government debt stands at 123 percent of GDP — the third highest in the EU.

The Socialist government has also profited from some circumstances that could swiftly change. The country’s surge in tourism came after terror attacks in rival destinations, the strong recovery across the eurozone boosted demand for Portuguese goods, and European Central Bank policies have eased the pressure on national finances. Barry Hatton, Lisbon, AP