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Voters in Portugal, a Beacon of Stability in Europe, Head to the Polls Portugal Prime Minister Is Re-Elected as Socialists Solidify Position
(about 8 hours later)
LISBON — The leader of the Socialist Party in Portugal, António Costa, lost an election four years ago but ended up becoming prime minister anyway after persuading two smaller left-wing parties to back him. At the time, the alliance was ridiculed as a “geringonça,” or “contraption,” that his opponents said would fall apart in no time. LISBON — Prime Minister António Costa of Portugal won Sunday’s national election, as voters rewarded his Socialist party for returning the country to robust growth and budgetary health.
Four years later, the “geringonça” label is worn as a badge of honor by Mr. Costa. He has become a rare thing in Europe — not only a Socialist head of government, but one who has overseen a robust economy and proved wrong the critics who had long caricatured the left as incapable of fiscal discipline. The Socialists appeared likely to fall short of a majority of the 230 seats in Parliament. But their margin of victory gave Mr. Costa plenty of leeway to negotiate an alliance with smaller parties, like the one that brought him unexpectedly into office four years ago.
By contrast, in neighboring Spain, Pedro Sánchez, the caretaker Socialist prime minister, faces a repeat election in November after months of fruitless negotiations to get voted into office by Parliament. The Socialists won about 37 percent of the vote, according to preliminary results, with about two-thirds of the votes counted.
Mr. Costa, 58, had been leading in the polls long before the voting on Sunday. Although his Socialist party is expected to fall short of a majority in Parliament, he is expected to maintain the support of some of the smaller parties that unexpectedly propelled him into office four years ago. In 2015, Mr. Costa lost the election, but ended up becoming prime minister anyway after persuading two smaller left-wing parties to back him. At the time, the alliance was ridiculed as a “geringonça,” or “contraption,” that his opponents said would fall apart in no time.
“Costa was somewhat lucky — Portugal had exited the bailout program, there was a boom in the tourism industry, the economy started to grow — but he also made his luck,” said Eunice Goes, a Portuguese professor of politics at Richmond University in Britain. Four years later, the “geringonça” label has been worn as a badge of honor by Mr. Costa. He has become a rare thing in Europe — not only a Socialist head of government, but one who has overseen a solid economy, helped by tourism and foreign investors, and proved wrong the critics who had long caricatured the left as incapable of fiscal discipline.
In late 2015, Mr. Costa promised to put an end to years of austerity that had been demanded by international creditors in return for granting a bailout of 78 billion euros, or about $85 billion, to Portugal during the financial crisis. Mr. Costa, 58, had been leading in the polls long before the voting on Sunday, making a Socialist victory appear as almost a foregone conclusion.
But since then, Mr. Costa has shown himself to be a firm believer in fiscal discipline, even squeezing investment in sectors like health care to bring Portugal close to a balanced budget. Still, as results trickled in on Sunday, they suggested a resounding defeat for the prime minister’s center-right opponents. They had maintained that Mr. Costa was doing little more than taking the credit for an economic recovery that he did not engineer. They argued that it was instead rooted in earlier spending cuts and reforms imposed by international creditors in granting a bailout of 78 billion euros, or about $85 billion, to Portugal during the financial crisis.
In late 2015, Mr. Costa promised to put an end to the austerity of the bailout program. But instead, he showed himself to be a firm believer in fiscal discipline, even squeezing investment in sectors like health care to bring Portugal close to a balanced budget.
The deficit has been cut from 7 percent of gross domestic product in 2014 to 0.4 percent at the end of last year. And the Portuguese economy has outpaced most of its European partners, while unemployment has almost halved, to just under 7 percent.The deficit has been cut from 7 percent of gross domestic product in 2014 to 0.4 percent at the end of last year. And the Portuguese economy has outpaced most of its European partners, while unemployment has almost halved, to just under 7 percent.
Portugal now stands out as an example of stability in Europe. “Costa was somewhat lucky — Portugal had exited the bailout program, there was a boom in the tourism industry, the economy started to grow — but he also made his luck,” said Eunice Goes, who is Portuguese and a professor of politics at Richmond University in Britain.
The fiscal turnaround has won plaudits internationally. In 2017, Mr. Costa’s finance minister, Mário Centeno, was elected president of the Eurogroup, the body of finance ministers that shapes policy within the eurozone. Portugal now stands out as an example of stability in Europe, while its fiscal turnaround has won plaudits internationally. In 2017, Mr. Costa’s finance minister, Mário Centeno, was elected president of the Eurogroup, the body of finance ministers that shapes policy within the eurozone.
Mr. Costa’s apparently smooth run toward re-election was recently shaken by a scandal involving his former defense minister, José Alberto Azeredo Lopes, who was indicted last month for covering up the theft of grenades and other weapons from an army depot in June 2017. Mr. Costa’s apparently smooth run toward re-election was recently shaken by a scandal involving his former defense minister, José Alberto Azeredo Lopes, who was indicted last month on charges of covering up the theft of grenades and other weapons from an army depot in June 2017.
But such a scandal pales in comparison with the fraud accusations that dogged the previous Socialist prime minister, José Sócrates, who is awaiting trial on charges of fraud and money laundering. Both Mr. Azeredo Lopes and Mr. Sócrates have denied wrongdoing. But that scandal pales in comparison with the fraud accusations that dogged the previous Socialist prime minister, José Sócrates, who is awaiting trial on charges of fraud and money laundering. Both Mr. Azeredo Lopes and Mr. Sócrates have denied wrongdoing.
Mr. Costa is a former mayor of Lisbon, which has been transformed by an influx of overseas tourists and investors, many of whom have become residents of Portugal to benefit from tax breaks offered to foreigners.Mr. Costa is a former mayor of Lisbon, which has been transformed by an influx of overseas tourists and investors, many of whom have become residents of Portugal to benefit from tax breaks offered to foreigners.
But the revamping of ancestral buildings in Lisbon and other cities has also pushed up property prices and raised the debate over growing wealth inequality, particularly as Portugal prepares for a broader European economic slowdown, with Germany standing on the brink of recession.But the revamping of ancestral buildings in Lisbon and other cities has also pushed up property prices and raised the debate over growing wealth inequality, particularly as Portugal prepares for a broader European economic slowdown, with Germany standing on the brink of recession.
Sergio Sambento, a Lisbon cafe owner, said he anticipated that this election could soon be followed by “a bad surprise for the Portuguese economy.” Tourism and foreign investors “brought us a lot of much-needed oxygen in the past few years, but we know things can change quickly,” he added. “Portugal looks great now to those who come from outside, but our health system has never been worse, the new jobs come with rubbish salaries, and our politicians continue to get caught up in scandals,” said Vasco Farias, a 56-year old civil engineer.
This year, fuel truck drivers held major strikes that forced Mr. Costa’s administration to take emergency measures, while nurses and other health care workers have also protested about their work conditions. Mr. Farias was among the roughly 46 percent of voters who stayed away from the polling stations, resulting in what preliminary results indicated was one of the lowest election turnouts since Portugal’s return to democracy in the 1970s.
The labor unrest has strained relations between Mr. Costa and his left-wing partners, who have accused him of turning Portugal into a European poster child of fiscal discipline instead of investing more in public services. This year, fuel truck drivers held major strikes that forced Mr. Costa’s administration to take emergency measures, while nurses and other health care workers also protested their work conditions.
Mr. Sánchez, the Spanish prime minister, praised Mr. Costa and his Portuguese model in a recent autobiography. But Mr. Sánchez has failed to replicate the formula. The labor unrest strained relations between Mr. Costa and his two left-wing partners, who accused him of turning Portugal into a European poster child of fiscal discipline instead of investing more in public services.
Depending on the election results, Mr. Costa could now try to form his next government with different allies, including perhaps the support of a party that defends animal rights. That party made among the biggest gains on Sunday.
The political stability in Portugal contrasts with the uncertainty in neighboring Spain, where Pedro Sánchez, the caretaker Socialist prime minister, faces a repeat election in November after months of fruitless negotiations to get voted into office by Parliament.
Mr. Sánchez, the Spanish prime minister, praised Mr. Costa and his Portuguese model in a recent autobiography. But Mr. Sánchez has so far failed to replicate the formula.
After winning a Spanish election last April, he feuded with Spain’s other left-wing party, plunging Spain into a new period of uncertainty. Next month, Spain will hold its fourth national election in four years.After winning a Spanish election last April, he feuded with Spain’s other left-wing party, plunging Spain into a new period of uncertainty. Next month, Spain will hold its fourth national election in four years.
The contrast could not be starker to what Mr. Costa achieved four years ago, when the center-right Social Democrats came out on top but could not form a coalition. In a remarkable turnaround, Mr. Costa then convinced the Communists and the Left Bloc to join with him. Addressing his supporters shortly after midnight, Mr. Costa said his Socialist victory would reinforce “the political stability that is essential for international confidence in Portugal.” Portuguese voters, he said, had given him a fresh mandate to negotiate another governing alliance, but “now with a stronger Socialist party.”
While Mr. Costa’s victory on Sunday appears to be a foregone conclusion, he may yet find that voters prefer to keep him in check, under the watchful eye of partners in another “geringonça” alliance.
“Portuguese voters are wary of governments who yield too much power,” said Ms. Goes, the professor at Richmond University. “They are keen to see the Socialists in power, but want to keep them on their toes.”