Bailout and austerity – two issues which loom large as Portugal votes in a presidential poll.
The election takes place against a background of big public spending cuts aimed at staving off an emergency rescue from the EU. Only last Tuesday in Lisbon, tension over the extent of the austerity boiled over.
The campaign itself has been low-key with next to no involvement from Portugal’s political parties. That is because the president’s role is largely ceremonial, meaning the race generally comes down to personalities.
Even so, Social Democrat incumbent Anibal Cavaco Silva looks all but assured of a second mandate with many seeing him as a safe pair of hands given the country’s economic woes.
He has openly backed the government’s tough economic stance and a recent poll gave him more than 60 percent support compared with 15 per cent for his nearest rival, Socialist Manuel Alegre.
While limited in executive power President Cavaco Silva appears to have played an important role in supporting the minority Socialist government of premier Jose Socrates, getting his Social Democrat allies to ensure the 2011 budget passed, one of the most severe in Europe.
The plan aims to slash Portugal’s annual deficit from more than seven percent of GDP to just over four and a half percent. The measures are drastic.
Civil servants will see a 5 percent cut in salaries, pensions will be frozen, while those who earn more than fifteen hundred euros a month will see a ten per cent reduction. Income tax and VAT have also been raised.
The belt tightening comes at an already difficult time. Portugal’s minimum wage stands at 475 euros a month, while around 1 million pensioners have to make ends meet on much less. 2.5 percent of the population also rely on food aid.
For the moment Portugal has managed to escape going cap in hand to the EU and IMF for a bailout like Ireland and Greece. That is why President Cavaco Silva’s promise to defend political stability is likely to win out.