When they came face to face during a television debate, the leaders of both of Portugal’s major parties – Passos Coelho, candidate of the centre-right, and José Socrates, the Socialist candidate – accused each other of worsening the country’s deep crisis.
However, the two have already committed to accepting the bailout from the IMF and EU. Neither has a large margin of error. What is certain, is that the task facing the winner is titanic.
The early elections have been made irrelevant by Portugal’s request for international aid, since the overriding reality is the figures. Of the 78 billion euro bailout, 12.6 billion has already been paid, so seven billion euros worth of debt and interest obligations due on 15 June can be met.
Whoever is in power, it is imperative to reduce the country’s deficit from 9.1 percent to 5.9 percent of GDP at the end of the year. Despite the current recession, savings of 5.7 billion euros still needs to be found. GDP is expected to contract by about two percent in 2011 and 2012.
The Portuguese are expecting tax increases, including VAT, which does not help businesses.
Rosa Cunha, a fishmonger, works 18 hours a day, but says it is not enough: “Before the IMF came, we were already on our knees. And I think that we’re going to have to pay more. Obviously we’re going to be in a worse situation, so we’re going to suffer. If we’re suffering now, we’re going to suffer even more in the near future.”
It is against this type of fatalism that outgoing prime minister Jose Socrates, must fight to recover the confidence of voters. He is the guarantor of a welfare state that he himself was forced to cut, making him unpopular.
Despite the drop in support for Socrates, André Freire from Lisbon’s University Institute, thinks people may vote for him because they do not want the alternative: “They are sick of José Socrates, but on the other hand they’re also asking – will it be better or worse to have the centre-right with a more neoliberal approach than the IMF?”
The centre-right opponent is Pedro Passos Coelho, a former private sector businessman, who has no experience in government. However, that has not prevented him from being tipped as the future prime minister of Portugal.