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Portugal votes in test for austerity policies

Portugal voted Sunday in an election seen as a test of four years of austerity, with the centre-right coalition that pushed through the punishing bailout seen as the favourite — but unlikely to win a clear mandate.

Prime Minister Pedro Passos Coelho’s “Portugal Ahead” coalition — joining his centre-right Social Democratic Party with the conservative Popular Party — has made a surprising comeback, with polls putting it ahead despite the harsh cuts its has enacted.

“We have had very tough times in past four years, with a lot of sacrifices. I am confident in the work I have done,” Passos Coelho told journalists after voting in a Lisbon suburb.

The coalition, in power since 2011, had 37.5 percent support against 32.5 percent for the main opposition Socialists led by Antonio Costa, a popular former mayor of Lisbon, in an average of the latest surveys.

The Socialists have vowed to ease the painful reforms they claim went further than its creditors demanded, but neither side is likely to win an absolute majority in the 230-seat parliament.

“The Portuguese want a change of government and policies, and open a new cycle of hope,” Costa said after casting his ballot.

But many believe the Socialists have lost the propaganda battle. “The right has succeeded in getting across the message that returning the Socialists would lead the country to bankruptcy,” political scientist Antonio Costa Pinto told AFP.

Other analysts warned that if there is no clear winner Portugal risks a period of instability that could endanger its fragile recovery.

With apathy gripping many voters, pollsters predict the numbers staying at home may even surpass the record 42 percent recorded in the last election.

Only one in five had voted by the middle of the day.

“Nothing will change anyway, austerity will continue,” said Manuel Augusto, 75, who said he voted for the Socialists.

Some among the more than 9.6 million electorate were more optimistic.

“I voted for those in power. Today, the country is doing a bit better,” said Domingos Birra, a 71-year-old pensioner.

– Impact of Greek crisis –

Passos Coelho, a 51-year-old economist, campaigned on his record of having navigated Portugal safely through the debt crisis and to a return to growth last year after three years of recession.

When he came to power in June 2011, Portugal was on the verge of defaulting on its debt mountain.

His Socialist predecessor, Jose Socrates, had just asked for a 78 billion euro ($88 billion) bailout from the European Union and the International Monetary Fund, making it the third eurozone country after Ireland and Greece to receive a financial rescue package.

Portugal exited the bailout scheme in May 2014, but only after the government imposed harsh austerity measures and the biggest tax hikes in living memory.

The jobless rate has since fallen to 12 percent from a peak of 17.5 percent at the beginning of 2013.

But the recovery has yet to be felt on the streets. One in five Portuguese continue to live below the poverty line with an annual income of less than 5,000 euros ($5,600).

Unlike Spain or Greece, Portugal has not seen the rise of a protest movement strong enough to challenge traditional parties at the polls.

The Greek crisis, which has been followed very closely by Portuguese voters, have may even have boosted the centre-right coalition.

“The attempt by Greece’s Syriza party to put an end to austerity has failed. Suddenly Portuguese voters see that there really is not alternative,” to austerity, political analyst Jose Antonio Passos Palmeira told AFP.

While the Socialists have pledged to lower personal taxes and reversing public sector pay cuts, the party has promised to stick to European budget rules.

– ‘Instability’ –

And Socialist leader Costa, 54, has struggled to distance himself from his scandal-hit predecessor Socrates, who served as premier from 2005-11.

Socrates, 58, was detained in November 2014 on suspicion of corruption and money laundering and is currently under house arrest.

Costa hardened his tone in the final weeks of the campaign, saying the Socialists would vote against the budget if the centre-right is re-elected.

Passos Coelho responded by warning that such a move could cause “instability that could lead to new elections in a very short time”.

Costa, a fearsome negotiator, could block a minority centre-right government by joining forces with the Left Block and the Communists, who together have between 16 and 18 percent support.

Polls close at 1800 GMT and first results are expected about an hour later.