PREVIEW: Fear of future overshadows Portuguese elections

By Emilio Rappold and Sinikka Tarvainen Jun 2, 2011, 20:44 GMT

Lisbon - Engineer Nuno is not looking forward to the parliamentary election in Portugal on Sunday.

'I'm afraid of the future. For myself, my family and my country,' says the 38-year-old. Like many in the country, he is struggling to survive after three years without a job.

He nevertheless intends to use his right to vote in the poll in which 9.6 million people are eligible to vote.

The election is being held two years ahead of schedule, after caretaker Prime Minister Jose Socrates resigned over parliament's rejection of his fourth austerity package in March.

Portugal's borrowing costs subsequently rose to unsustainable levels, forcing the country to accept a 78-billion-euro (112-billion-dollar) bailout from the European Union and the International Monetary Fund (IMF).

The two institutions demand tough austerity policies which are expected to increase poverty in Portugal.

About 40 per cent of Portuguese children already live in poverty, according to a study by Lisbon's Technical University that was quoted by the daily Publico.

'After the elections, everything will be different and much worse,' former president Mario Soares predicted gloomily.

In such challenging times, Portugal needs a strong and stable government, but the elections are not expected to produce one.

A recent opinion poll showed conservative opposition leader Pedro Passos Coelho with a lead of only five percentage points over Socrates, who headed a minority Socialist government.

Relations between the two main political parties are so acrimonious that a coalition is deemed all but impossible.

Passos Coelho's Social Democratic Party (PSD) might, however, build a coalition with the conservative-nationalist CDS-PP, Portugal's third largest party, analysts said.

The Socialists, PSD and CDS-PP have agreed to apply the bailout conditions set by the EU and IMF, which are opposed by far-left parties.

The conditions include spending cuts in health, education and pensions, tax hikes and measures to make firing workers easier - all of that at a time when popular discontent is mounting against the record 12 per cent unemployment and precarious living conditions.

Hundreds of thousands of Portuguese marched against such problems in March, describing themselves as a 'generation in despair.' Smaller protests have followed since then, and strikes have become a regular occurrence, especially in the transport sector.

Portugal has suffered from weak growth, an excessive reliance on low-tech sectors such as textiles or tourism, and low competitiveness for over a decade.

Socrates tried to trim the 9.1 per cent budget deficit, but failed to win parliamentary support for his austerity policies and was forced to resign.

In northern Portugal, nearly a quarter of the workforce is unemployed in some places from where multinational factories moved to cheaper locations in Asia and eastern Europe.

'I tighten my belt all the way to the last notch,' said Adelia Tavares, a former shoe factory employee who found a new job earning a mere 487 euros a month, in an interview with the Spanish daily El Pais.

Economic difficulties are even making some women 'rent their wombs' and become surrogate mothers despite that being illegal in Portugal, the news agency Lusa reported.

Thousands are emigrating to other European countries, the Americas or southern Africa, with experts speaking of the biggest emigration wave in 160 years.

The new government, however, will have no alternative but to swallow the bitter medicine of the EU and IMF, which will watch the elections with concern.

Portugal's creditors fear that if the poll produces another weak government, Lisbon might be unable to fully apply the bailout programme, and put the financial rescue in danger.