Portuguese Coalition Loses Parliamentary Majority
October 04 2015 - 09:10PM
Dow Jones News
LISBON—Prime Minister Pedro Passos Coelho, who oversaw years of
unpopular austerity measures that averted Portugal's bankruptcy,
finished far ahead of his Socialist rival in elections on Sunday,
but his center-right coalition lost its majority in Parliament.
The unexpectedly strong showing boosted the chances, but didn't
assure, Mr. Passos Coelho's re-election to a second four-year
term.
His governing coalition—which joins his Social Democratic Party
with the smaller Democratic and Social Center Party—won 104 of the
230 seats in Parliament, according to near-complete official
returns.
Former Lisbon Mayor Antonio Costa's Socialist party, which
promised to ease some belt-tightening measures but stick to
European Union standards of fiscal restraint, won 85 seats.
Two radical antiausterity parties—the Left Bloc and a coalition
of Communists and Greens—won a total of 36 seats.
Mr. Passos Coelho said late Sunday he would seek an accord with
the Socialists to allow him to form a minority government and pass
legislation needed to sustain Portugal's recovery from a punishing
recession.
"Our obligations as a government require us to set aside our
party flags and unite everyone who wants to build a better
country," he told supporters.
Mr. Costa gave no assurances. "It is clear that an expressive
majority voted for a political change," he said. But he signaled he
wouldn't challenge Mr. Passos Coelho's re-election unless other
leftist parties in Parliament agreed to form a majority behind the
Socialists' own pro-EU program.
Austerity fatigue had made Mr. Passos Coelho, a 51-year-old
career politician with a degree in economics, the underdog in the
race.
Taking office in 2011, he had raised taxes and cut spending on
public employees' salaries, education and health care to meet
budget targets set by international lenders under the €78 billion
($87 billion) rescue.
The measures drove down the budget deficit to about 3% of gross
domestic product estimated for this year, from close to 10%, but
brought down his popularity with it.
Until late August, polls gave the Socialists a lead. But as
undecided voters made up their minds in the campaign's closing
weeks, surveys showed sentiment swinging the other way.
Mr. Passos Coelho delivered a consistent message of improvement
since Portugal's exit from the bailout program in May 2014. The
jobless rate has fallen to close to 12% from a peak of 17%, and
gross domestic product is expected to grow 1.6% this year.
The prime minister reminded voters that a Socialist government
had been forced to seek the bailout after leading Portugal to the
brink of insolvency four years ago.
That message resonated with Julio Gata, who lined up in the rain
to vote in Lisbon.
"Of course no one wants austerity, but above all, no one wants
instability," said Mr. Gata, 71, a retired grain farmer. He was
voting for the prime minister's slate of candidates, he said,
"because I trust them more to keep stability."
Mr. Costa tried, with mixed messages, to woo both voters who
want continuity and those who reject the idea of belt tightening to
pay off the €220 billion public debt. At one point, he called for
an end to political confrontation; days later, he said he would
shoot down Mr. Passos Coelho's budget in Parliament if the prime
minister were re-elected.
Both men promised to stimulate faster growth by raising public
salaries and eliminating a special income tax imposed under the
bailout plan. But Mr. Passos Coelho said he would move at a slower
pace than Mr. Costa.
Antiausterity parties with more radical positions gained at the
Socialists' expense. But none achieved the popularity of Syriza in
Greece or the Podemos party in Spain, which have capitalized on the
pain of bailout-mandated austerity in those countries.
Write to Patricia Kowsmann at patricia.kowsmann@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 04, 2015 20:55 ET (00:55 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.