Por­tu­gal gov’t re-elected de­spite painful aus­ter­ity

The China Post - - INTERNATIONAL - BY BARRY HAT­TON

Por­tu­gal’s cen­ter- right coali­tion gov­ern­ment earned another four-year term Sun­day, win­ning a gen­eral elec­tion be­hind an im­prov­ing econ­omy that weath­ered the aus­ter­ity mea­sures con­tested across Europe, but fall­ing short of a cru­cial out­right ma­jor­ity in Par­lia­ment.

With 99 per­cent of dis­tricts re­port­ing, the gov­ern­ment had 37 per­cent com­pared with 32 per­cent for the main op­po­si­tion cen­ter-left So­cial­ist Party. Smaller, left­ist par­ties made up the rest.

The vic­tory was bit­ter­sweet, how­ever, as the gov­ern­ment failed to achieve a par­lia­men­tary ma­jor­ity. That means it will be out­num­bered in the 230-seat cham­ber by left-of-cen­ter law­mak­ers who could block its pol­icy pro­pos­als. A pe­riod of po­lit­i­cal in­sta­bil­ity could en­sue, mak­ing in­vestors once again ner­vous about the eu­ro­zone’s abil­ity to sort out its eco­nomic prob­lems.

In­cum­bent Prime Min­is­ter Pe­dro Pas­sos Coelho said his gov­ern­ment is de­ter­mined to abide by the eu­ro­zone’s fis­cal rules. He said he is will­ing to com­pro­mise with op­po­si­tion par­ties to achieve the “es­sen­tial goal” of re­duc­ing na­tional debt.

“Times haven’t been easy, and the times ahead will be chal­leng­ing,” he said.

Por­tu­gal needed a 78 bil­lion-euro (US$87 bil­lion) bailout in 2011 amid the eu­ro­zone’s debt cri­sis. The gov­ern­ment com­plied with a Ger­man-led aus­ter­ity plan to re­store the 19-na­tion bloc’s fi­nan­cial health, cut­ting pay, pen­sions and public ser­vices and in­creased taxes that brought large street protests and strikes.

The aus­ter­ity poli­cies helped pro­pel Por­tu­gal into a three-year re­ces­sion, and the So­cial­ists were op­ti­mistic they would ben­e­fit from a back­lash against the gov­ern­ment.

So­cial­ist leader An­to­nio Costa con­ceded de­feat, but warned that the gov­ern­ment must change its con­duct now that it has lost its out­right ma­jor­ity in Par­lia­ment. “The gov­ern­ment has to un­der­stand that things are dif­fer­ent now,” Costa said, adding that he would not seek to make the coun­try un­govern­able.

The econ­omy is im­prov­ing, al­low­ing the gov­ern­ment to ar­gue that 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.

Por­tu­gal shunned the kind of rad­i­cal al­ter­na­tives that have emerged in Europe in re­cent years, such as Greece’s Syriza and Spain’s Pode­mos, which have chal­lenged main­stream par­ties from the far left. The Por­tuguese have a tra­di­tional pref­er­ence for mod­er­ate par­ties, and vot­ers ap­par­ently feared knock­ing the long-awaited eco­nomic re­cov­ery off- track. A hand­ful of grass­roots anti-aus­ter­ity par­ties barely reg­is­tered in the bal­lot.

The Por­tuguese gov­ern­ment’s show­ing will give heart to Mar­i­ano Ra­joy’s con­ser­va­tive gov­ern­ment in neigh­bor­ing Spain, which faces an elec­tion Dec. 20. Ra­joy’s gov- ern­ment has im­posed deep spend­ing cuts, but growth has re­turned to the coun­try.

Pas­sos Coelho, Por­tu­gal’s 51-year-old prime min­is­ter, has nur­tured an im­age as a cool-headed, res­o­lute leader who is de­ter­mined to re­store his coun­try’s for­tunes through un­pop­u­lar mea­sures and painful re­forms, what­ever the po­lit­i­cal cost. He says Por­tu­gal can’t af­ford to go back to bor­rowand-spend poli­cies and must live within its means.

The gov­ern­ment, made up of the So­cial Demo­cratic Party and its ju­nior part­ner, the Pop­u­lar Party, united the right-of-cen­ter vote while the left-of-cen­ter vote was frag­mented be­tween the So­cial­ists, the Left Bloc — with at least 10 per­cent, its best-ever re­sult — and the Com­mu­nist Party, with 8 per­cent.

AP

Por­tuguese Prime Min­is­ter Pe­dro Pas­sos Coelho waves to sup­port­ers fol­low­ing the an­nounce­ment of the re­sults of Por­tu­gal’s gen­eral elec­tions in Lis­bon, Sun­day, Oct. 4.

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