Reuters: Portuguese punish ruling party for bailout pain in local polls

29 September 2013

Portuguese voters punished the ruling Social Democrats for painful austerity under an EU/IMF bailout, boosting opposition and independent candidates in municipal elections on Sunday.

"Judging by the first data, I think there's no mistake in saying the PSD [Social Democratic Party] has suffered a great defeat. What remains to be seen is whether the Socialists get all that the PSD has lost or divide it with independents", said Marques Mendes, a former PSD minister and commentator.

With votes in hundreds of parishes yet to be counted, partial results showed the Socialists well ahead with 40 per cent. The PSD was behind on 34 per cent - though that was bolstered by the 7 per cent scored by its coalition partner CDS-PP.

The bailout was agreed under a previous Socialist administration, but it was the following PSD-led coalition government that had to apply the budget cuts and tax hikes required under the rescue package. "It's a heavy defeat, but we'll see only later whether the government gets weakened by it", Mendes added.

The government nearly collapsed in July over an internal dispute about measures that have included the biggest tax hikes in living memory. Big losses at the local level and a strong triumph by the opposition could sap the government's appetite for further action. EU and IMF officials are currently reviewing the bailout and demanding more budget cuts.

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