BURSON-MARSTELLER INSIGHT
The Portuguese general election Portugal moves to the Right and faces an austere future 7 June 2011
The Portuguese general election of 5 June has ushered in a new political era in Portugal. The centre-right Social Democratic Party (PSD) will lead a right-wing majority government, under Pedro Passos Coelho - but it will face economic difficulties and social turmoil in the near future. The mood for change was clear, with the population tired of a Socialist (PS) government that failed to reignite the economy and which was forced to request an international rescue plan. Votes turned to the PSD and the right-wing Democratic and Social Centre – People's Party (CDS-PP) as the ‘country’s saviours’, or as a protest against the PS government and the outgoing prime minister, José Sócrates. Context Economic crisis, bailouts and social unrest
The results The Right sweeps back into power
Portugal is living through one of the worst economic and social crises in its history. With the country on the edge of bankruptcy, the outgoing PS-led government applied for a bailout from the International Monetary Fund (IMF), European Commission and European Central Bank (ECB). This ‘troika’ rescue plan is worth €78bn and aims to help Portugal to reduce its huge private and public debt. Meanwhile, the economy has been in deep recession for the last two quarters, and forecasts suggest that the economy will continue to contract for two more years. Unemployment has reached a peak of 11.9%, with more than 800,000 people out of work. According to analysts, the rate of joblessness will climb to 13% in 2012.
The PSD won the elections with 38.63% of the vote and won 105 seats, an increase of 27 seats. This was a larger proportion than that won by the PS in 2009. The PS finished second, with 28.05% of the vote and 73 seats (down 23 on 2009). The CDS-PP came third, with 11.24% of the vote and 24 seats (up by three seats) – its best result in 28 years. The results in detail Party
EU party
PSD
EPP
105
+27
With the bailout in place, the country now faces a series of radical and urgent adjustment measures that will focus on liberalisation of the labour market, the privatisation of several public companies, a reduction in public spending and reform of the justice system. From a social point of view, Portugal has been somewhat split in two; between those who have lost their job, have no particular skills and are in debt, and those who managed to keep their jobs, are benefiting from low interest rates, and behave like nothing happened.
38.6
PS
PES
73
-23
28.1
CSD-PP
EPP
24
+3
11.2
CDU (PCP/PEV)
None / Greens
16
+1
7.9
BE
European Left
8
-8
5.2
The elected Parliament reflects a divided country, between left and right: there are 97 deputies for the left parties (PS, CDU and BE) and 129 deputies for the right parties (PSD and CDS-PP).
Burson-Marsteller EMEA Public Affairs Practice 37 Square de Meeûs, 1000 Brussels • Tel +32 2 743 66 11 • Fax +32 2 733 66 11 robert.mack@bm.com • www.burson-marsteller.eu
Share (%)
Outgoing PM José Sócrates (Flickr/CC José Goulão)
However, there was a further division, between voters and nonvoters. The abstention rate reached its highest level in a general election, with 41.1% of the 9.5 million listed voters failing to cast a valid vote.
Contact Maria Domingas Carvalhosa Public Affairs practice leader, Lift Consulting
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Meanwhile, there were contrasting fortunes on the far left. The Democratic Unity Coalition (CDU), a pact between the Portuguese Communist Party (PCP) and the Ecologist Party ‘The Greens’ (PEV) saw its vote increase to 7.94%, winning 16 seats (up one). The Left Block, however, scored only 5.19% and fell behind the CDU. It lost half of its MPs, falling from 16 seats to just eight.
PSD leader Pedro Passos Coelho and CDS-PP leader Paulo Portas, the victors in the election
Robert Mack Chair, EMEA Public Affairs Practice
Seats
David O’Leary Director, Burson-Marsteller Brussels
Analysis A ‘hat-trick’ for the Right For the first time since Portugal became a democracy in 1974, the dream of the Right has come true: it has a parliamentary majority, control of government, and holds the Presidency of the Republic. Until now, many said that a majority could not be won without the centre – but for the first time, PSD and CDS-PP won more than 50% of the votes. The PSD showed that they could win by moving to the Right, and have announced that their economic plans will go further than those stipulated in the ‘troika’ rescue plan. The government will be lead by Pedro Passos Coelho, a 46 yearold economist. He has no government experience, but does have a majority in Parliament and the support of the President (Aníbal António Cavaco Silva, a former PSD leader and prime minister). Even before the official results were announced, the President called Mr Passos Coelho to urge him to form a cabinet with majority support. It is highly possible that Mr Passos Coelho may represent Portugal at the next European Council, on 23 June.
Next steps Tough times ahead There are big expectations of the new government team, which is yet to be announced, particularly in terms of the new government’s political weight and experience. The new team will have to implement the tough measures imposed by the IMF, the European Commission and the ECB in the ‘troika’ memorandum of understanding. The actions of the communist and socialist trade union federations (CGTP and UGT) will also be watched closely, with a strong possibility of a social uprising led by the PCP and the BE in the face of the tough austerity measures ahead. With the former prime minister and PS leader José Sócrates announcing his resignation, there is also some question over which way the PS will turn – especially as some level of consensus will be needed to fulfil the commitments to the ‘troika’. Original text by Maria Domingas Carvalhosa, Public Affairs Practice Leader at Lift Consulting, Lisbon. Lift Consulting is BursonMarsteller’s exclusive affiliate agency in Portugal. For more information, please contact domingas.carvalhosa@lift.com.pt or visit www.lift.com.pt.
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