Socialists keep power in Portugal but less popular

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(Agencies)
Updated: 2009-09-28 10:56

LISBON, Portugal: The center-left Socialist Party is staying in government for four more years after winning elections Sunday but its reduced parliamentary majority may handicap its efforts to lead Portugal out of an economic crisis.

With almost all votes counted, the incumbent Socialists had 36.5 percent compared with 29 percent for the center-right Social Democratic Party, the main opposition party.

That gave the Socialists 94 seats in the 230-seat Parliament, making it vulnerable to opposition efforts to block legislation, which requires approval by more than half of lawmakers.

Four years ago the Socialists collected 43 percent of the vote and 121 seats.

Unable to repeat that landslide after introducing social and economic reforms that antagonized many, the Socialists might now seek parliamentary alliances to ensure that legislation is passed. Only one minority government has survived its full term since democracy was introduced in Portugal 33 years ago.

Three smaller parties also secured seats in Parliament. The conservative Popular Party polled 10.5 percent, while the more radical socialist Left Bloc had almost 10 percent, and the Communist/Green coalition almost 8 percent. Eleven fringe parties apparently won too few votes to earn seats in Parliament. Voter turnout was 60.5 percent.

Portugal's economy requires urgent measures. It is forecast to contract by as much as 4 percent this year, and just over 9 percent of the work force — a 20-year high — is already unemployed.

The state budget deficit could exceed 6 percent this year — double the amount allowed for countries like Portugal, which use the 16-nation euro currency. Public debt is also forecast to overtake annual gross domestic product this year in one of the EU's worst records of indebtedness.

"We have once more been chosen to govern Portugal," said Prime Minister Jose Socrates, the Socialist leader.

"This is a clear and extraordinary victory," he said, promising to consult with opposition parties on legislation.

Socrates has pledged big-ticket public works projects to stimulate growth.

The Socialists are ready to spend euro5 billion ($7.3 billion) on a new Lisbon airport, euro3 billion ($4.4 billion) on a bullet train link to Spain and euro1.7 billion ($2.5 billion) on a road and rail bridge across the River Tagus at Lisbon.

Socrates has blamed Portugal's economic woes on the global meltdown, and vowed to stick with his reforms.

"This was a victory for a policy of reform, of modernization and social fairness," Socrates said.

The Socialist government in the past four years imposed a series of widely contested reforms aimed at boosting the economy, which has lagged behind others in the European Union despite receiving billions in EU development aid since joining the bloc in 1986.

The reforms have included raising the civil service retirement age from 60 to 65 and slashing long-standing welfare entitlements, angering unions.

The Socialists are credited with placing Portugal among the continent's pioneers in the development of clean energy and electric cars, and Socrates has put hundreds of thousands of computers in schools.

Portugal remains western Europe's poorest country, however, with some of the lowest productivity and education levels, and about a third of workers taking home less than euro600 ($880) a month after tax.

The country is shackled by labor laws introduced by radical leftist governments after the 1974 Carnation Revolution ended a four-decade dictatorship.

Conceding defeat, Social Democrat leader Manuela Ferreira Leite said her party would continue to oppose the Socialist spending plan in the single-chamber Parliament.

"The Social Democratic Party won't keep quiet nor will it be intimidated," she said.

Leite, the Social Democrat who was seeking to become Portugal's first elected woman prime minister, also proposed reforms but said they must go deeper and pursue broader consensus.