Supporters of Portuguese Prime Minister and Socialist Party leader Antonio Costa react following the announcement of firsts election results in Lisbon Sunday night, Oct. 6, 2019. An exit poll indicates the center-left Socialist Party has collected the most votes in Portugal's general election and is poised to continue in government for another four years. (AP Photo/Armando Franca)

Portugal's Socialists prepare 4 more years in government

October 06, 2019 - 7:04 pm

LISBON, Portugal (AP) — The center-left Socialist Party collected the most votes in Portugal's general election Sunday, leaving it poised to continue leading the government for another four years.

With 208 seats in the 230-seat parliament awarded in the official count, the Socialists reached 99 seats, compared with 74 for the second-place Social Democratic Party. Social Democrat leader Rui Rio conceded defeat.

The parliament chooses a government, usually taken from the party that has the most lawmakers.

It remained unclear, however, whether the Socialists would get a parliamentary majority, with votes from abroad being counted late.

That could mean the Socialists take power as a minority government or pursue alliances with other left-of-center parties to pass legislation — as they did in their last term with the Portuguese Communist Party and the radical Left Bloc.

The Left Bloc, which had won 17 seats in the incomplete count, said it was ready to open negotiations with the Socialists on a government program.

The Portuguese Communist Party had 10 seats and the Christian Democrats five.

Small fringe parties also picked up a handful of seats, and some of them could be targets for the government to recruit support in parliament.

Antonio Costa, the Socialist leader and incumbent prime minister, took power four years ago on a promise to undo austerity measures introduced during Europe's financial crisis, when Portugal needed an international bailout.

Now his Socialists reaped the rewards of Portugal's economic rebound in recent years. Annual growth climbed from 0.2% in 2014 to 2.1% in 2018, and unemployment dropped by around half, to 6%, over that period.

As other Socialist parties have lost ground across Europe in recent years, Costa's administration has proved wrong the doubters who said it would overspend and endeared itself to its European Union partners by straightening out Portugal's ill-managed public finances.

The budget deficit — long a torment for Portugal as governments routinely overspent — is now close to zero under the financial stewardship of Finance Minister Mario Centeno, who also chairs the meetings of finance ministers from the 19 European nations that used the shared euro currency.

Centeno is expected to continue in the post.

The Social Democrats are still associated in the public mind with deep cutbacks and a three-year recession that ended in 2014, when they were in government. Also, party leader Rui Rio has struggled to contain disagreements between factions of his party.

Smaller, fringe parties may also gain a handful of seats in the 230-seat Republican Assembly, the country's parliament, which will elect the next government. The country's president is mostly a figurehead.

Portugal hasn't witnessed the rise of populist or far-right parties which have risen to prominence elsewhere in the EU. Protests in Portugal are traditionally channeled into a low turnout — the exit poll said it could be a new low of around only half the country's 10.8 million eligible voters.

The next government faces plenty of challenges, including the United Kingdom's impending departure from the EU. The U.K. is one of Portugal's main export markets.

While government spending is now more in line with revenues, Portugal's government debt is equivalent to more than 120% of gross domestic product — the third highest in the EU. And the combined government, private and corporate debt is more than three times the country's GDP, the Bank of Portugal says. If European interest rates rise, the Portuguese could find themselves in big trouble.

Other challenges include climate change, as rainfall in the southern half of the country dwindles, and an aging population that threatens the financing of the welfare system. The EU says that at current fertility rates the number of Portuguese will decline from 10.3 million this year to 6.6 million in 2100.

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