Portuguese voters punish government over austerity programme

The party of prime minister Pedro Passos Coelho suffered its worst defeat in Portuguese municipal elections in more than two decades on Sunday, as voters punished the government for pursuing a strict austerity programme.

With virtually all votes counted yesterday evening, his Social Democratic Party (PSD) had lost control of 30 municipalities, including five major cities. The opposition Socialists made large gains, including 12 municipalities.

The elections were to choose representatives on 308 municipal councils and more than 3,000 smaller town councils.

Low turnout

The vote was held nearly 2½ years after Mr Passos Coelho and the PSD took power, shortly after the country had requested a €78 billion rescue from the European Union in April 2011.

“At times when it is difficult to govern there is always a price to pay,” he said yesterday.

The PSD governs in coalition with the smaller Popular Party.

While the result appeared to mark a shift in Portugal’s political balance, the celebrations of the Socialists were tempered by a low turnout, with more than 47 per cent of voters staying away, a record for municipal elections.

Smaller parties and independents were big beneficiaries of the government's electoral disaster. Independent Rui Moreira was voted in as mayor of Porto, unseating the PSD, which had governed Portugal's second city for 12 years. "If the political parties haven't understood what happened here today, they haven't understood a thing," he said.

Economy

The economy has been the dominant issue of the campaign, with the PSD vowing to continue a tight spending policy that has cut the deficit but frequently brought angry workers on to the streets. The Socialists, meanwhile, are calling for fewer cuts to help bring a jobless rate of more than 16 per cent under control.

Rumours a second bailout is in the offing have been simmering for months and Saturday's Público newspaper quoted unnamed EU officials who saw the rescue as "practically inevitable". The newspaper said the new package could total €50 billion.