Ruling Portugal coalition wins election, loses majority

Portugal’s centre-right government on Sunday won an election that was a test of its tough austerity stance, but its failure to win a majority in parliament raises the prospect of political uncertainty.


Prime Minister Pedro Passos Coelho would be the first leader in Europe to be re-elected after imposing hardships on voters under international bailout packages that followed the start of the sovereign debt crisis in 2009.

Yet a minority government could unnerve investors in the Iberian country of 10 million. Not one minority administration has survived a full term in Portugal since the 1974 overthrow of the fascist regime installed by dictator Antonio Salazar.

With 99.1 percent of parishes in the country counted, the ruling coalition had around 38.5 percent of the vote while Socialist challenger Antonio Costa had 32.4 percent. The final count will not be available until late on Monday.

Passos Coelho said he was ready to form a new government but suggested he may to have to compromise on policies.

“We interpret the results with a lot of humility,” he said.

“We failed to reach a majority in parliament.”

The results showed the government with just 100 seats in the 230-seat parliament – well short of the 116 it would need for a majority – although the tally could rise slightly with the final result.

Costa, who has promised to ease austerity and deliver more disposable income back to families, said his party had failed to meet its goal of victory but he would not resign and the Socialists would stick to their policies.

“Nobody can count on the Socialists to support policies that go against the Socialists,” he said. “There was a large majority of Portuguese who voted for change.”

The small Left Bloc increased its share to about 10 percent of the vote, while traditional Communists obtained 8.2 percent.

Antonio Barroso, senior vice president at the Teneo Intelligence consultancy in London, said political instability was set to rise.

“The good result of the extreme-left Left Bloc will force the Socialists to harden their stance towards the government, which does not bode well for political stability over the medium term,” Barroso said in a research note.

The first hurdles could come with the presentation of the 2016 budget in coming weeks.

Passos Coelho’s coalition raised taxes while cutting public spending, but argued during the campaign that the country was now finally beginning to see the fruit of the measures with a gradual return to growth after three years of recession.