Portugal’s Coelho Faces Oct. 4 Election After Surviving Bailout

Portuguese Prime Minister Pedro Passos Coelho
Portuguese prime minister Pedro Passos Coelho. Photographer: Jock Fistick/Bloomberg

Portuguese Prime Minister Pedro Passos Coelho’s ruling coalition will face the opposition Socialists in elections on Oct. 4 after serving a four-year term that included completing a bailout program.

“It’s extremely desirable that the next government has consistent, majority support in parliament,” President Anibal Cavaco Silva said in a televised address on Wednesday evening to announce the date of the vote. By law, elections had to take place between Sept. 14 and Oct. 14.

While anti-austerity parties like Podemos in Spain and Greece’s Syriza have challenged traditional parties in polls as they tap into voter discontent, Portugal has seen continued support for the two parties that have taken turns in governing the country since 1981. Portugal in 2011 followed Greece and Ireland in requesting a bailout from the European Union and International Monetary Fund, exiting that aid program three years later.

The Socialists, the biggest opposition party, led the ruling coalition by 0.2 percentage point in a survey published on July 19 by Jornal de Negocios. The poll indicated 38 percent backing for the Socialists, unchanged from a June survey, and 37.8 percent support for the coalition of Prime Minister Coelho’s Social Democrats and the smaller conservative CDS party, 0.6 percentage point higher than in June.

Absolute Majority

In the June 2011 elections, the Social Democrats won 39 percent of the vote and got 108 members of parliament, or about 47 percent of the 230 seats in the legislature. The Socialists won 28 percent of the vote and got 32 percent of the seats. The CDS party won 12 percent of the vote and got about 10 percent of the seats.

Coelho, 50, formed the majority coalition with the CDS after the 2011 elections, taking over from a Socialist minority government led by Jose Socrates that requested the nation’s bailout in April 2011. The prime minister said in a July 14 interview with television channel SIC that his coalition wants an economic recovery led by exports and that the Socialists are proposing that consumption should lead growth.

Socialist leader Antonio Costa, 54, said on the next day that the government’s policy failed on employment and investment. Costa, formerly the mayor of Lisbon, became opposition leader after winning primary elections in September. He was also minister of internal administration from 2005 to 2007 during Socrates’ first government.

Full Term

Since losing the 2011 election, the Socialists voted alongside the ruling coalition on certain key policies including the European Stability Mechanism treaty and the country’s budget framework law.

The government forecasts the economy will expand 1.6 percent in 2015 and accelerate in the next two years. Gross domestic product grew 0.9 percent in 2014, after contracting in the previous three years. Unemployment will fall to 13.4 percent in 2015, still higher than 12.9 percent in 2011, according to the European Commission’s May 5 forecasts.

Coelho leads the first Portuguese coalition government to survive a full term in office since 1974, when the country returned to democracy after a four-decade dictatorship.

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