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Portugal's Prime Minister and Socialist leader Jose Socrates gestures after the ruling Socialists won the Portuguese general elections in Lisbon - Source: Reuters
Portuguese Socialist Prime Minister Jose Socrates won a second
term in a general election on Sunday but, as expected, his
centre-left party lost its absolute majority in parliament.
Socrates won about 37% of the vote, compared with 45% in 2005.
That leaves him with the delicate task of having to opt to rule
alone in a minority government, form a coalition, or negotiate in
parliament on a case-by-case basis.
He kept his options open in his victory speech.
"The people voted and they spoke very clearly, the Socialist Party
was chosen again to govern Portugal," Socrates said, adding it was
too early to talk about coalitions or pacts.
He said only after consultations with the president and other
political parties in mid-October would everybody know what the
political solution will be.
"Socrates is cool, Socrates is cool!" supporters shouted at
Socialist Party headquarters.
The centre-right Social Democrats under Manuela Ferreira Leite, 68,
who had campaigned for vigorous public sector spending cuts, gained
around 29% of the vote, virtually unchanged from 2005.
Analysts said a minority government was most probable.
"They will most likely form a government on their own and at least
in the first year there should be some stability, with the main
opposition party obviously weakened by the election result," said
political scientist Antonio Costa Pinto.
Uncertainty ahead
"The victory gives the Socialists a good result but it is difficult
to foresee if they can hold out for a full term."
Socrates will not only have to repair the economy after its deepest
recession in decades but also rectify the long-term economic
weaknesses that caused it to lag behind its European partners in
the past decade.
Unemployment is 9.1% and rising, its highest since the 1980s.
With the deficit set to reach 5.9 percent of gross domestic product
this year, the budget is likely to need spending cuts or tax
hikes.
Such a challenge could force the Socialists to work with the
Social Democrats on issues such as public finance and the 2010
budget.
During his first term, Socrates embarked on what were considered
ambitious reforms, including of public pensions and the civil
service.
Market-friendly reforms of this kind could be difficult to
repeat with a minority.
With 99% of votes counted his Socialists were on course to hold 96
seats in the new parliament, sharply down from 121 seats in the
230-seat parliament during his first term.
On other issues, like social reform, the Socialists may turn to
left-wing parties.
Socrates, like the left, sees a bigger government role in the
economy, with projects to create jobs.
The Left Bloc, one possible ally on the left for the Socialists,
posted strong gains from the last election, rising to 10% support
from 6.3% in 2005.
But analysts doubted any kind of formal coalition government was
likely with either the left or the right.
"A coalition scenario is not impossible, but would be very
difficult as left-wing parties have no incentives to ally with the
Socialists, being ideologically very distant," said Pedro Magalhaes
of the Catholic University of Lisbon.
"An alliance with (right-wing) CDS-PP would cause a lot of
dissatisfaction within the Socialist party."
Socrates has advocated a series of big, vote-winning infrastructure
projects, such as a high-speed train link to Spain and a new Lisbon
airport to boost jobs and growth.
This year the economy is expected to contract by up to four
percent.
