This content is not available in your region

Portuguese cautiously upbeat after PM's surprise majority win

Access to the comments Comments
By Reuters
Portuguese cautiously upbeat after PM's surprise majority win
Portuguese cautiously upbeat after PM's surprise majority win   -   Copyright  Thomson Reuters 2022

By Catarina Demony and Miguel Pereira

LISBON – Portuguese voters cautiously hailed the return of political stability on Monday after a long election night delivered a surprise majority to Prime Minister Antonio Costa’s Socialists, but the rise of a far right party triggered concerns.

Defying all odds, Costa won a strong mandate in the snap ballot, which was called after parliament rejected his minority administration’s budget bill. The Socialist Party (PS) won at least 117 seats, a majority, leaving the main opposition party, the centre-right Social Democrats (PSD) with just 71.

“Nobody was expecting it, not even the PS itself, but I think it is good for the country – we need stability,” said 69-year-old Antonio Carlos as he walked around one of Lisbon’s neighbourhoods.

Joao Fidalgo, 39, was more cautious, saying he worried that the majority could lead the Socialists to drift rightward.

“I hope the PS continues to pursue centre-left policies and they are not deceived by big companies and economic interests,” he said.

Investors welcomed Costa’s victory, although Portugal’s PSI20 stock index only edged 0.5% higher.

“Costa’s government developed a reputation for fiscal discipline and now, with a strong mandate…investors will feel reassured, in a dynamic that is likely to offer support to Portuguese assets,” said Luxembourg-based Ricardo Evangelista, director at ActivTrades Europe.

Analysts say left-wing voters, including supporters of the Socialists’ former allies, Left Bloc and the Communists, rallied behind Costa’s party to ensure the PSD did not win the election, as it was likely to have to rely on the far right for support.

The Communists and Left Bloc lost about half of their seats.

The far-right Chega emerged as the third-largest parliamentary force, making a big leap from just one seat in the previous legislature to 12. Many Portuguese felt stunned.

“It is a party of extremes, of fascism…I’m surprised that Portugal still wants this to be represented in the country,” said Mariana Murça, 22, adding that Costa deserved to win after his stewardship during the COVID-19 pandemic.