Portugal poll result points to desire to reform despite cost

In voting for the centre-right Social Democrats, who vowed to “go beyond” the terms of Portugal’s bailout agreement, the nation has opted to give reforms a chance to end its debt crisis even at a high price, analysts say.

The Social Democrats (PSD) won 105 seats in the 230-seat parliament in Sunday’s early election, against 73 for outgoing Prime Minister Jose Socrates’s Socialists, with only the overseas vote left to tally.

PSD leader Pedro Passos Coelho, who holds a degree in economics, said he would seek to form a coalition government with the smaller, conservative CDS-PP party — which captured 24 seats — that would have a comfortable majority in the legislature.

That will allow the new government to push through parliament the deep spending cuts and economic reforms Lisbon agreed to in May with the so-called “troika” — the European Union, International Monetary Fund and the European Central Bank — in exchange for the 78 billion euro ($114 billion) bailout.

Lisbon University political scientist Marina Costa Lobo said the vote on the right “is the result of a realistic attitude, of pragmatism, a certain optimism on the part of the Portuguese people.”

“The right will have to implement a difficult programme but according to the polls, an overwhelming majority of Portuguese people feel that the programme of the ‘troika’ will be positive for Portugal,” added Lobo, who holds a doctorate from Oxford.

Among the measures called for in the three-year bailout deal are tax hikes, a freeze on state pensions and salaries, a reduction in jobless benefits as well as their duration and a reform of the justice system to speed up courts.

Unlike in Greece and Ireland, the other two eurozone nations that requested a bailout, in Portugal all three main parties — the Socialists, the PSD and the CDS-PP — backed the terms of the bailout agreement.

During Sunday’s election the vast majority of voters, 78.4 percent, cast their ballots for these three parties.

“The Portuguese have endorsed Pedro Passos Coelho and therefore austerity. But where some see austerity, others see a streamlining of public services or simply living according to your means,” said Lisbon Univeristy sociologist Manuel Villaverde Cabral.

“People hope that with a change in habits, things will eventually get better,” added Cabral, who warned that Portugal “hasn’t seen anything yet” in terms of government spending cuts.

The three austerity plans put in place by outgoing Socialist Prime Minister Jose Socrates “targeted mainly public workers,” he added.

Passos Coelho campaigned on a promise to go further than the bailout deal in terms of privatisations and eocnomic reforms.

“Pedro Passos Coelho chose the hardest path to win the elections because he presented a plan and measures, some of them difficult and controversial,” the director of business daily Diario Economico, Antonio Costa, wrote in an editorial.

The abstention rate in Sunday’s election hit a record 42.3 percent, beating the previous record of 40.3 percent set during the last election in 2009.

Costa Lobo said many voters were turned off from taking part in the election because of a sense that whatever party was elected would have reduced scope for action because of the bailout deal.

“The abstention was especially strong among left-wing voters who did not want to vote for Socrates but who did not want to pick another candidate,” she added.

Antonio Costa Pinto, a political scientist at the University if Lisbon, said abstention was also “a certain form of protest, unfortunately a passive one.”

“It also doubtless represents a disillusionment over the way political parties work and a scepticism over the real differences between governing parties,” he added.