LISBON (MNI) – Portugal’s opposition Social Democrats won a
convincing victory in Sunday’s national election and the party’s leader,
Passos Coelho, is on course to become the country’s new prime minister
in a center-right coalition government, according to press reports.
With most of the ballots counted, the Social Democrats had about
40% of the vote, compared with 28% for the Socialist Party, headed by
current Prime Minister Jose Socrates, who lost a vote of confidence in
April but stayed on until the election as head of a caretaker
government.
Socrates has admitted defeat and will resign as head of the
Socialists, according to media reports.
The conservative Democratic and Social Center Party (CDS) got
around 11% of the vote and is expected to join the Social Democrats as
junior partner in a majority coalition government.
The new government will have the onerous task of overseeing
Portugal’s E78 billion EU-IMF bailout plan, which requires large public
spending cuts through 2013, during which time the country is expected to
be mired in recession. Unemployment is already above 12% and is expected
to rise further, putting a squeeze on domestic demand.
All the major parties are in agreement on the need for the bailout
package, but it remains to be seen how easily the new government will be
able to pass the austerity measures and economic reforms required by the
EU and IMF as a condition of aid.
With Greece spiraling towards default and requiring another bailout
estimated at E60 billion, the success of Portugal’s plan takes on added
significance for the Eurozone.
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