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Portugal’s prime minister promises voters shelter from economic storm

Portugal’s prime minister promises voters shelter from economic storm

Spain and Portugal are close neighbours yet studies in political contrasts — to the relief of António Costa.

While Spain’s frustrated prime minister Pedro Sánchez has been bogged down in fruitless coalition talks and now faces fresh elections, across the border his counterpart Mr Costa, another Socialist, is sailing towards another term in office.

Mr Costa has adroitly interpreted the public mood. Four years ago he capitalised on a yearning to end austerity, promising, “there is another way”. That strategy brought him to power at the head of a minority government backed by the far left.

Today, as Europe battens down the hatches for a downturn, Mr Costa has recast himself as a guardian of sound public finances. His promise of budget surpluses rather than big pay rises could win him an absolute majority in the October 6 general election.

“To shelter from any storm that may arise, we have to stay on the path of fiscal consolidation,” Mr Costa has said.

The prime minister’s metamorphosis from a determined “anti-austerity” leader into a champion of the fiscal orthodoxy favoured in Brussels is targeted squarely at centrist voters.

His centre-left Socialists (PS) enjoy a lead of more than 15 percentage points over the centre-right Social Democrats (PSD), the main opposition party, which steered Portugal through a punishing 2011-14 bailout. The PSD is now offering voters big tax cuts, while Mr Costa urges budgetary rigour.

Mr Costa is “a pragmatic, intelligent leader who knows how to strike deals to the left and the right when they suit his intentions”, said Isabel David, a political science professor at the University of Lisbon (ISCSP). Knowing that “the Portuguese are wary of monetary expansion and excessive state spending”, he is “playing the card of a responsible politician who does not want to jeopardise the economy”.

According to pollsters the PS’s projected share of the vote, currently about 39 per cent, is close to the percentage needed for an outright majority of parliamentary seats.

Mr Costa is appealing for a “strong PS” rather than an outright majority, acknowledging that Portugal has “bad memories” of concentrating what many consider excessive power in a single party.

Yet few doubt the prime minister’s ambition is to win an absolute majority for the PS. “Everyone understands that that is [Mr Costa’s] objective” and “the central question of this election”, Luís Marques Mendes, a political commentator and former PSD leader, told SIC television recently.

In making fiscal rigour the crux of his campaign, Mr Costa has in effect made the leftwing parties that have kept him in power his main opponents. An election that produced “a weak PS” and a strong Left Bloc (BE), the anti-capitalist party that supports his minority administration, would make the country “ungovernable”, he warned in an interview with the Expresso newspaper.

The risk of such a result, he said, would be to place Portugal in a similar impasse to that of Mr Sánchez in Spain. Mr Sánchez has failed to form a government because he could not secure support from the smaller leftwing Podemos party.