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Bail-out at centre of debate in Portugal’s election campaign

Published on 22/05/2011

Portugal's election campaign got under way Sunday, with the row over the multi-billion-euro international bailout already the main focus of debate.

As voters ponder who should steer them through the debt crisis, the centre-right opposition Social Democrats (PSD) blamed the outgoing Socialist administration for the country’s economic woes.

PSD leader Pedro Passos Coelho has accused outgoing Prime Minister Jose Socrates of having plunged Portugal into “quasi-bankruptcy.”

Socrates resigned in March after failing to win parliamentary support for stiff austerity measures setting up the electoral showdown on June 5.

Latest polls indicate the race is close: the PSD has scored between 31.1 and 35.7 percent; the Socialists between 29.5 and 34.1 percent.

The right-wing Democratic and Social Centre-People’s Party (CDS-PP), which is polling 13 percent of likely voters making them likely members of any coalition government.

These latest poll figures suggest Socrates has recovered from the poor poll ratings his party registered when the government fell in March.

Two days after Socrates resigned, an opinion poll gave the opposition PSD 46.7 percent support against 24.5 percent for the Socialists.

After his austerity package was turned down by parliament, Socrates was forced to seek a bailout from the European Union, European Central Bank and the International Monetary Fund.

The country needs to repay nearly five billion euros ($7 billion) in maturing debt.

Last week, the IMF approved a 26-billion-euro ($36.9-billion) three-year loan to Portugal as part of an EU-backed bailout for a country struggling with low growth and a shaky financial sector.

Coelho, 46, has attacked Socrates for having refused to acknowledge the seriousness of the country’s economic troubles and for delaying a loan request that, according to the opposition leader, was inevitable.

Socrates, in power for six years, insisted at a debate between the leaders on Friday that the loan “could have been avoided” if the opposition had accepted his austerity programme.

The loan package is expected to handcuff Portugal’s next government, as it comes with stiff conditions, including a demand that Lisbon embarks on a major raft of public sell-offs.