Voters move Portugal to the right amid economic frustrations

Businessman Pedro Passos Coelho will lead a coalition government after voters handed the center-right a convincing victory. Portugal's bailout and austerity measures were central issues.

By , Correspondent

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    Pedro Passos Coelho, leader of the center-right Social Democratic Party, PSD, gestures to supporters from the top of an open deck bus in Lisbon after his party won Portugal's general elections Sunday, June 5.
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Portuguese gave their government a severe scolding for its handling of the economic crisis during Sunday’s snap general elections, handing the center-right opposition a solid mandate to govern through at least another two years of recession.

The vote ended months of uncertainty since the Socialist government of Prime Minister José Sócrates collapsed in March after it lost all parliamentary support for a series of austerity measures, even from its allies.

Pedro Passos Coelho, a businessman with no prior experience in office, led the Social Democratic Party (PSD) to a commanding victory in the unicameral Parliament with almost 39 percent of the vote, or 105 of the 250 seats.

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The result was expected following growing frustration with the government’s handling of the economic crisis, although many analysts say the convincing victory, regardless of political background, is good news.

“In moments of crisis, and this one will last for some time, it’s good to have political clarity to take rough decisions. This is good news. A clear outcome is good news, regardless of ideology,” says Janis A. Emmanouilidis, a senior policy analyst and head of the European Politics and Institutions program in the Brussels-based European Policy Center.

“The economic crisis has functioned as a catalyst,” Mr. Emmanouilidis adds, referring to a series of electoral defeats from incumbent governments, not only in peripheral countries but throughout Europe. These include Spain, the UK, France, Germany, the Netherlands, Italy, and Greece.

Mr. Passos Coelho vowed that he would "not rest until Portugal returns to growth." But he also warned citizens to arm themselves “with a big dose of courage to overcome difficulties because results will not come in two days,” but in “two or three years.”

The Socialist Party of Mr. Sócrates suffered a serious setback with 28 percent of votes, or 73 seats, 23 fewer than the last election in 2009. Incoming Prime Minister Passos Coelho has already said he will partner with the rightist CDS-PP, the third most-voted party, which won almost 12 percent of the vote, or 24 seats.

Voter turnout in the country of 11 million fell to less than 59 percent, illustrating just how disenchanted Portuguese are with traditional parties.

Portuguese economic growth in 2010 reached 1.3 percent, but the economy has been contracting since the last quarter of 2010, when it fell 0.3 percent. The first quarter of 2011 it shrank a further 0.7 percent, and the European Commission predicted last month that the economy for the full year would fall 2.2 percent and another 1.8 percent in 2012.

Portugal, threatened with a debt default as markets demanded prohibitively high interest rates of nearly 8 percent, was forced to request a humiliating 78-billion euro rescue in April from the bailout fund created by the European Union and the International Monetary Fund.

While Passos Coelho did not take the political blow of requesting the bailout, he will have to implement the unpopular austerity measures that bind Portugal to reduce its deficit of 9 percent of gross domestic product in 2010 to 5.9 percent in 2011, 4.5 percent in 2012, and 3 percent in 2013.

The incoming prime minister said he will meet Portuguese bailout commitments and has announced he will downsize ministries and other public sector agencies and privatize companies. Unemployment already stands at 12 percent and is expected to rise.

For his part, Sócrates said he took full responsibility for the debacle and resigned as Socialist Party leader.

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