Portuguese opposition losing ground ahead of key vote

Portugal’s opposition Social Democrats (PSD) held a narrow lead over the ruling Socialists in new voter surveys Saturday but were forecast to fall short of an overall majority in next weekend’s elections.

The anticipated result is reawakening fears that the new government will have trouble meeting demands for stiff austerity measures to qualify for a bailout from the European Union and International Monetary Fund.

Polls conducted by the Publico daily and the Expresso news weekly put the PSD slightly ahead in the June 6 polls with 34.8 percent of the vote on average.

Outgoing Prime Minister Jose Socrates’ Socialist party polled an average 33.2 percent.

The right-wing CDS party was predicted to win between 11 and 13 percent of votes in the contest triggered by Socrates’ resignation in March after failing to win parliamentary support for stiff austerity measures.

The prime minister was subsequently forced to seek a bailout to repay nearly five billion euros ($7 billion) in maturing debt.

All three main parties have pledged to introduce reforms negotiated by the outgoing minority government with the EU and IMF in exchange for a loan of 78 billion euros over the next three years.

But they remain divided over the steps needed to cut the deficit, particularly with regard to taxation, privatisation, the labour market and the health service.

“The implementation of the programme could pose problems if we once again find ourselves without a parliamentary majority,” Commerzbank analyst David Schnautz told AFP.

“Even if the measures are imposed from outside, putting them into effect quickly requires a strong government fort.”

The election campaign has seen Socrates warn against the right returning to power, accusing PSD leader Pedro Passos Coelho of seeking to use the aid plan as a pretext to destroy the welfare state by privatising health and education.

Passos Coelho for his part has accused Socrates of paying lip service to a plan which he had signed up to.

Political analysts said that if the Socialists win on June 5 President Anibal Cavaco Silva, a PSD member, would call for a coalition of all three main parties.

The left could not govern on its own because communists and the far-left both reject the aid plan.

However the daily Diario de Noticias pointed out Saturday that a Socialist victory would spark a political trial of strength which would delay the formation of a new government.

The first evaluation mission from the EU, IMF and Central European Bank is due in Lisbon at the end of July.

The election campaign took a new turn late Friday when the media revealed there were two different versions of the bailout plan.

The first, backed by the PSD and CDS as well as the Socialists, was followed by a second, signed by the Socrates government alone, which differed notably in matters of timing, according to the finance ministry.

The revelation sparked an attack on the Socialists’ “lack of transparency” by Passos Coelho, who said nevertheless he would implement the aid programme “whatever the final version.”