Socialists ousted in Portuguese elections
Published 06/06/2011 | 05:00
Portugal's Social Democrats and the conservative People's Party will hold enough seats in parliament to form a majority, according to the vote count in parliamentary elections held yesterday.
The Social Democrats won 39pc of the vote and 96 seats in the 230-member parliament, with 99pc of the country's 4,260 voting districts reporting, according to the government's election results website.
The People's Party, a possible coalition partner for the Social Democrats, won 12pc of the vote and 20 seats.
Miguel Relvas, the Social Democrats' secretary-general, and Social Democrat vice-president Marco Antonio Costa declined to comment on the prospects for a coalition, according to state-run RTP television.
The ruling Socialist Party won 28pc of the vote and 65 seats in parliament, according to the results.
Portugal's opposition Social Democrats ousted the ruling Socialists in elections, putting Pedro Passos Coelho in charge of enforcing austerity measures mandated by a €78bn bailout.
"The Portuguese people's will for change is unequivocal and clear," Mr Relvas said in comments broadcast by state-run RTP television.
Former prime minister Jose Socrates' government fell in March after lawmakers rejected his deficit-cutting proposals intended to avoid a bailout.
With the country's debt and borrowing costs surging, Portugal followed Greece and Ireland in seeking a rescue.
The risk premium investors demand to hold 10-year Portuguese notes over German bunds has climbed to 675 basis points from about 440 basis points when Mr Socrates resigned.
Bonds may gain as a weakened minority government gives way to a new leadership with a mandate, said Filipe Silva, who manages €60m at Banco Carregosa in Oporto, Portugal.
"In the bond market, it's possible that this election result is seen as something positive in the short term," Mr Silva said. "But I don't think it's enough to change the trend in Portuguese bonds."
All three major parties have committed to austerity measures that aim to cut the deficit to the EU ceiling of 3pc of gross domestic product by 2013 from a forecast 5.9pc in 2011. The economy is set to shrink this year and unemployment rose to 12.4pc in the first quarter.
Mr Passos Coelho (46) won party elections in 2010 to become the leader of the Social Democrats.
"Families and companies have been bearing the austerity we have had until now," he said on April 11.
"Now, austerity for the state will also be needed."