Portugal government re-elected despite harsh austerity

Portugal's governing coalition re-elected after four years of harsh austerity, but loses parliamentary majority  

Portuguese Prime Minister Pedro Passos Coelho
Portuguese Prime Minister Pedro Passos Coelho

Portugal’s governing centre-right coalition has triumphed in a general election that was widely viewed as a referendum on four years of harsh austerity.

With 99% of districts reporting on Sunday, the government had 37% of the vote, compared with 32% for the main opposition centre-left Socialist Party.

Left Bloc won 10% of the vote, its best ever result, securing 19 seats, and the Communist Party took 8% of the vote.

Socialist Party leader Antonia Costa admitted defeat and congratulated Prime Minister Pedro Passos Coelho.

However, with 99 seats in 230-seat parliament, the ruling coalition has fallen 17 seats short of an outright majority.

Coelho said the government is determined to abide by the Eurozone’s fiscal rules and indicated he was willing to compromise with opposition parties to achieve the “essential goal” of reducing national debt.

“Times haven’t been easy, and the times ahead will be challenging,” he admitted.

Costa warned that the government must change its conduct now that it has lost its parliamentary majority.

“The government has to understand that things are different now,” he said after conceding defeat, while insisting that he would not seek to make the country ungovernable.

Portugal needed a €78 billion bailout in 2011 amid the Eurozone’s debt crisis. In return for the bailout, the Portuguese government complied with a German-led austerity plan to restore financial health, by cutting pay, pensions and public services, and increasing taxes.

The austerity policies helped propel Portugal into a three-year recession and led to large street protests and strikes.

However, the economy grew by 1.5% in the first half of this year when compared with the same period in 2014. The unemployment rate has fallen from a record 17.7% in 2013 to 12.3% last July.