Main­stream Por­tuguese mod­er­ates ex­pected to win poll

The China Post - - INTERNATIONAL - BY BARRY HAT­TON

Mod­er­ate main­stream par­ties were ex­pected to tri­umph in Por­tu­gal’s gen­eral elec­tion Sun­day, af­ter more rad­i­cal al­ter­na­tives failed to ex­ploit public dis­con­tent over aus­ter­ity mea­sures.

The cen­ter- right coali­tion gov­ern­ment was close to re­elec­tion, opin­ion polls in­di­cated, de­spite en­act­ing tax in­creases and cut­ting pay, pen­sions and public ser­vices over the past four years.

Those poli­cies were part of a eu­ro­zone plan to re­store the 19-na­tion bloc’s fi­nan­cial health fol­low­ing its debt cri­sis. The gov­ern­ment has warned the coun­try can’t af­ford to go back to the bor­row-and-spend pro­grams of the past and must re­main fru­gal till its debt load is lower.

The gov­ern­ment’s clos­est ri­val was the cen­ter- left So­cial­ist Party, the main op­po­si­tion force, which also ac­cepts eu­ro­zone fi­nan­cial rules but prom­ises to start eas­ing the tax bur­den and speed up growth through do­mes­tic con­sump­tion.

Un­like in some other eu­ro­zone coun­tries, no prom­i­nent rad­i­cal par­ties fight­ing aus­ter­ity have emerged dur­ing the tough times. Protest votes tra­di­tion­ally go to the Com­mu­nist Party, which is ex­pected to achieve its usual sup­port of around 10 per­cent of votes, and the newer Left Bloc, forecast to poll around 5 per­cent.

The Com­mu­nist Party wants Por­tu­gal out of the eu­ro­zone. The Left Bloc wants to rene­go­ti­ate the na­tional debt, de­mand­ing bet­ter re­pay­ment terms from cred­i­tors, and end aus­ter­ity mea­sures while in­creas­ing cor­po­rate tax.

A hand­ful of grass­roots an­ti­aus­ter­ity par­ties have barely reg­is­tered in opin­ion polls.

By noon (1100 GMT, 7 a.m. EDT), the turnout fig­ure had reached 20.7 per­cent of those el­i­gi­ble to vote, the gov­ern­ment said.

Por­tu­gal was close to bank­ruptcy dur­ing the eu­ro­zone fi­nan­cial cri­sis and needed a 78 bil­lion- euro ($ 87 bil­lion) bailout in 2011. The So­cial­ists were in power for six years be­fore that piv­otal event, leav­ing them vul­ner­a­ble to ac­cu­sa­tions of poor eco­nomic man­age­ment.

The sub­se­quent cen­ter- right gov­ern­ment’s spend­ing cuts and tax hikes helped pro­pel Por­tu­gal into a three- year re­ces­sion.

But this year the econ­omy is im­prov­ing, and in­cum­bent Prime Min­is­ter Pe­dro Pas­sos Coelho says aus­ter­ity is pay­ing off. The econ­omy grew 1.5 per­cent in the first half of this year com­pared with the same pe­riod in 2014. The un­em­ploy­ment rate has fallen from a record 17.7 per­cent in 2013 to 12.3 per­cent last July.

Teresa God­inho, a mid­dleaged psy­chol­o­gist vot­ing at a polling sta­tion in Lis­bon’s sub­urbs, said she didn’t en­tirely agree with the gov­ern­ment, but voted for it be­cause there were no other vi­able op­tions.

“I lost my trust in the So­cial­ist Party when they left us nearly bank­rupt,” she said.

But Ti­ago Amaral, a sales­man un­em­ployed for the past 18 months, said he opted for the So­cial­ists be­cause he was frus­trated.

“All I know is some­thing’s got to change,” he said.

Por­tu­gal still faces big prob­lems. Gov­ern­ment debt re­mains high at al­most 130 per­cent of gross do­mes­tic prod­uct — the third- high­est in the Euro­pean Union. Por­tu­gal is Western Europe’s poor­est coun­try in fi­nan­cial terms and recorded av­er­age growth of less than 1 per­cent in first decade of the cen­tury. Its econ­omy is still frail, and any po­lit­i­cal in­sta­bil­ity could quickly de­rail the re­cov­ery.

Por­tuguese Pres­i­dent

Ani­bal Cavaco Silva, who has no ex­ec­u­tive pow­ers, said the elec­tions “take place at a cru­cial time for the coun­try.”

“We face some very com­plex chal­lenges,” he said in a tele­vised ad­dress to the na­tion Satur­day night.

Aus­ter­ity- minded gov­ern­ments in other eu­ro­zone coun­tries have felt a back­lash at the bal­lot box, but the Por­tuguese don’t ap­pear to have any ap­petite for po­lit­i­cal up­heaval af­ter the re­cent tur­bu­lent times.

An­a­lysts have noted that by com­mit­ting it­self to eu­ro­zone fi­nan­cial rules the So­cial­ists have lit­tle room for ma­neu­ver­ing in their eco­nomic pol­icy pro­pos­als.

So­cial­ist leader An­to­nio Costa says it’s time to “turn the page on aus­ter­ity.” Among other mea­sures, he wants to lower the res­tau­rant sales tax from 23 to 13 per­cent, bring back four public hol­i­days that were abol­ished to im­prove pro­duc­tiv­ity, and re­store slashed gov­ern­ment work­ers’ pay.

A worry for in­vestors is that the re­sult could bring in a mi­nor­ity gov­ern­ment that has no guar­an­tee of pass­ing its poli­cies. The quest for the main par­ties is to col­lect an out­right ma­jor­ity of 116 seats in the 230- seat Par­lia­ment.

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