LISBON – Portuguese voters go to the polls in two days in an election that may produce a minority government, hindering efforts to revive economic growth and trim a budget deficit that has doubled in the past year.
Prime minister José Sócrates’s Socialist Party led polls published yesterday by three newspapers with about 38 per cent of votes.
The Social Democrats of former finance minister Manuela Ferreira Leite had between 29.1 per cent and 30 per cent. The Socialists have widened their lead since the campaign started on September 14th, though they still remain short of the 45 per cent of the vote they needed to win a parliamentary majority in 2005.
In previous polls, support for the Socialists over the Social Democrats was often within the margin of error. “A minority government will have greater difficulty in continuing budget consolidation,” said Filipe Garcia, an economist at Oporto-based financial consulting company IMF-Informacao de Mercados Financeiros. “In 2010 we may have a government with no strength to approve measures, and without a budget approved.”
Mr Socrates (52) has pledged to step up public-works spending on such projects as a €7.5 billion high-speed rail network to revive economic growth and create jobs.
Ms Ferreira Leite (68) says the country cannot afford such spending and will focus on smaller projects, cutting the debt.
The next government will inherit an economy that the Bank of Portugal says will shrink 3.5 per cent this year and that has failed to achieve annual growth of 2 per cent since 2001. Joblessness has reached a 22-year high at 9.1 per cent and is climbing.
After leading the Socialists to their first parliamentary majority in 2005, Mr Socrates raised taxes and cut public employees’ pay to tackle the deficit, which was twice the EU ceiling when he took office. After he brought the shortfall within the EU limit in 2008 and forecast faster growth, the worldwide financial crisis derailed his plans. His efforts to control public spending, including raising the retirement age for civil servants and changing labour laws, cost him support with the party’s base. His policies triggered protests, including one that drew 100,000 teachers from all over Portugal, and he faced the country’s first general strike since 2002.
Mr Socrates has avoided talking about post-election alliances, saying at a rally this week that the contest was between him and Ms Ferreira Leite. Instead of forming a coalition, Mr Socrates may rely on one-off parliamentary agreements with opposition parties to pass legislation. “The most likely outcome is we’ll have to live with a minority government,” Mr Garcia said. – (Bloomberg)