Government News: Top Stories

Economic fears drive Portuguese presidential vote
by Barry Hatton

The Associated Press Translate This Article
20 January 2011

LISBON, Portugal (AP) - Portuguese voters fearing their nation is heading toward economic disaster seem poised to re-elect a conservative economist as president by a landslide Sunday in a vote that could make governing difficult for the nation's Socialist prime minister.

The presidential job carries no executive powers, but a big win for front-runner Anibal Cavaco Silva would be seen as a rebuke for Prime Minister Jose Socrates' five-year record in power as he tries to prevent debt-heavy Portugal from being forced to accept the next European bailout package.

Portugal's minority government is walking a tightrope, trying to win back the confidence of international investors unnerved by its high debt burden while scrambling to maintain shaky public support for austerity measures including pay and welfare cuts and tax hikes.

The Socialists don't face a general election until 2013, but right-of-center opposition parties —including the Social Democratic Party that Cavaco Silva once led —have warned they may call for a vote of no-confidence in Parliament if the government admits failure and resorts to a bailout.

'The government is under a lot of pressure at the moment. They're in a very fragile situation,' Diego Iscaro, an analyst at IHS Global Insight in London, said in a telephone interview.

Though Portugal is one of the 17-nation eurozone's smaller members, worries about Portugal's fate are magnified by the possibility that its troubles could add to pressure on far bigger neighbor Spain and propel Europe's debt crisis into a more alarming phase.

Many analysts believe Portugal will end up needing a financial rescue like the ones provided to Greece and Ireland last year. The government insists it can weather the storm alone, but its reforms will likely take years to revive Portugal's ailing economy.

The economic crisis has been at the heart of the campaign, and most polls have Cavaco Silva collecting about 60 percent of the vote.

Cavaco Silva served as prime minister from 1985-1995, shepherding Portugal's entry to the European Economic Community, now the European Union.

During his tenure European aid catapulted Portugal into fast-track development, but the country failed to introduce far-reaching reforms which could have prolonged its prosperity, and it became overly dependent on foreign loans.

The 71-year-old Cavaco Silva advocates prudent public spending and has supported the Socialists' debt reduction policies but vowed to keep up criticism of big-ticket public works projects, such as a high-speed train line to Madrid, which he deems too costly and which the government regards as a potential jolt for the sluggish economy.

'I will be demanding with the government and I will keep a close eye on the proposals coming from Parliament and the executive,' he said.

The president can veto legislation, though Parliament can overturn the veto.

Presidents who are re-elected for a second, and final, term in Portugal are usually outspoken, so 'we can expect some tension, though it all depends on how the crisis unfolds,' said Andre Freire, a political scientist at Lisbon's Superior Institute for Labor and Business Sciences.

The Socialist Party's own candidate, 74-year-old lawmaker and celebrated poet Manuel Alegre, opposes free-market policies that endanger welfare rights but is getting only about 25 percent of the vote in recent opinion polls.

There are four other candidates, and the winner must get 50 percent plus one vote or a runoff will be held for the two top vote-getters.

Many glum Portuguese depressed about the economy are expected to simply stay away from the polls.

Maria Lino, a 27-year-old office worker, said she is fed up with politicians but thinks Cavaco Silva deserves to win.

'He can keep the government in line,' she said.

Copyright © 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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