Portugal’s Social Democrats Lose Town Halls After Local Election

The Social Democratic Party of Portuguese Prime Minister Pedro Passos Coelho won fewer town halls in municipal elections yesterday than in the previous, 2009, vote.

The Socialists, the biggest opposition party in parliament, won 36 percent of the vote and 132 town halls with 2,971 of the country’s 3,092 voting districts reporting, according to the government’s election website. The ruling Social Democrats won 17 percent of the vote and 77 mayoralties when running alone, according to the partial results. Including alliances with other parties, it won 92 town halls.

The Social Democrats won 117 town halls and 24 percent of the vote in local elections held in October 2009, without including votes in municipalities in which it ran in alliances with other groups. Including those alliances, the Social Democrats won 139 town halls. The Socialists won 39 percent of the vote in the last local elections and 132 town halls out of a total of 308.

“The result was not what we wanted,” Coelho said in a televised speech. “The Social Democratic Party had a national electoral defeat.”

The local elections took place about two weeks before the government hands in its 2014 budget proposal, which will include new spending cuts. Prime Minister Coelho, whose term ends in 2015, has to trim spending by about 3.3 billion euros ($4.5 billion) in 2014 after relying mainly on tax increases this year to meet targets set in its 78-billion euro aid program from the European Union and the International Monetary Fund.

Debt Markets

Portugal is also trying to regain full access to debt markets with the end of the aid plan approaching in June 2014. The EU is considering help next year to try to wean Portugal from the bailout, and officials from the EU and IMF began a regular review of the aid program on Sept. 16.

The Socialist lead over the ruling Social Democrats narrowed in a poll on parliamentary voting intentions published by weekly newspaper Expresso on Sept. 13. The survey showed 26.5 percent backing for the Social Democrats, up about 2 percentage points from August, and 38 percent support for the Socialists, an increase of 0.6 percentage point.

The prime minister is backed by his Social Democratic Party and the smaller conservative CDS party, which together have a majority of seats in parliament.

The government forecasts a return to growth next year after three years of contraction and an unemployment rate climbing to 18.2 percent in 2013. Portugal targets a budget deficit of 5.5 percent of gross domestic product in 2013, 4 percent in 2014 and below the EU’s 3 percent limit in 2015, when it aims for a 2.5 percent gap. It estimates debt will peak at 123.7 percent of GDP in 2014.

To contact the reporter on this story: Joao Lima in Lisbon at jlima1@bloomberg.net

To contact the editor responsible for this story: Stephen Foxwell at sfoxwell@bloomberg.net

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