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| Pedro Passos Coelho, Who Led Austerity Plan in Portugal, Nears Re-Election | Pedro Passos Coelho, Who Led Austerity Plan in Portugal, Nears Re-Election |
| (4 days later) | |
| LISBON — For most of his four years in office, Prime Minister Pedro Passos Coelho has been the unpopular flag-bearer of austerity in Portugal. In the face of street protests and strikes, he stuck rigidly to the spending cuts and tax increases that the country’s creditors demanded. | |
| And on Sunday, he could become the first national leader in Europe to win re-election after overseeing a painful international bailout of his country. | And on Sunday, he could become the first national leader in Europe to win re-election after overseeing a painful international bailout of his country. |
| A year ago that outcome seemed highly unlikely, but now it appears within reach: The latest opinion polls show Mr. Passos Coelho’s center-right coalition with a wafer-thin lead over the Socialists and other left-leaning parties. | A year ago that outcome seemed highly unlikely, but now it appears within reach: The latest opinion polls show Mr. Passos Coelho’s center-right coalition with a wafer-thin lead over the Socialists and other left-leaning parties. |
| His chances have improved along with a consumer-driven economic recovery that has finally started to improve the job market in Portugal. The unemployment rate has fallen to 12 percent from a peak of 17.5 percent in early 2013. | His chances have improved along with a consumer-driven economic recovery that has finally started to improve the job market in Portugal. The unemployment rate has fallen to 12 percent from a peak of 17.5 percent in early 2013. |
| The recent turmoil in Greece has also helped Mr. Passos Coelho by raising tensions among Portugal’s already fragmented left. Even if the main opposition party, the Socialists, wins the most votes on Sunday, it could struggle to form a viable governing coalition with the Communists and other left-wing parties, some of which are demanding a restructuring of Portugal’s debt. | The recent turmoil in Greece has also helped Mr. Passos Coelho by raising tensions among Portugal’s already fragmented left. Even if the main opposition party, the Socialists, wins the most votes on Sunday, it could struggle to form a viable governing coalition with the Communists and other left-wing parties, some of which are demanding a restructuring of Portugal’s debt. |
| Mr. Passos Coelho, 51, has campaigned largely on the argument that the country needs continuity in government to avoid derailing the economic recovery or risking another bruising confrontation with its creditors. | Mr. Passos Coelho, 51, has campaigned largely on the argument that the country needs continuity in government to avoid derailing the economic recovery or risking another bruising confrontation with its creditors. |
| “The images of people queuing to get their money out of Greek banks was used over and over again by the ruling coalition, and it has probably made people here more afraid about not respecting European rules,” said Maria de Belém, a Socialist lawmaker and former minister. “So people are now going to vote with a bit of fear, and a lack of hope.” | “The images of people queuing to get their money out of Greek banks was used over and over again by the ruling coalition, and it has probably made people here more afraid about not respecting European rules,” said Maria de Belém, a Socialist lawmaker and former minister. “So people are now going to vote with a bit of fear, and a lack of hope.” |
| The Socialists — led by António Costa, the former mayor of Lisbon — have also been stained by a former prime minister, José Sócrates, who is under house arrest and awaiting formal charges linked to an investigation of fraud and tax evasion. | The Socialists — led by António Costa, the former mayor of Lisbon — have also been stained by a former prime minister, José Sócrates, who is under house arrest and awaiting formal charges linked to an investigation of fraud and tax evasion. |
| The party lost power in the last national election in June 2011, shortly after Mr. Sócrates was forced to call on international creditors to rescue Portugal from unsustainable borrowing costs. Mr. Passos Coelho became prime minister and completed the three-year bailout program on schedule in 2014. | The party lost power in the last national election in June 2011, shortly after Mr. Sócrates was forced to call on international creditors to rescue Portugal from unsustainable borrowing costs. Mr. Passos Coelho became prime minister and completed the three-year bailout program on schedule in 2014. |
| Many voters have become disillusioned. Joana Pimenta, an architect who usually backs the Socialists, said she would not vote at all this time because of “a level of corruption that has even left our former prime minister in prison.” She said she had never missed voting in a national election before. | Many voters have become disillusioned. Joana Pimenta, an architect who usually backs the Socialists, said she would not vote at all this time because of “a level of corruption that has even left our former prime minister in prison.” She said she had never missed voting in a national election before. |
| If she were forced to vote on Sunday, Ms. Pimenta said, it would probably be for Mr. Passos Coelho’s slate. “The austerity cuts have been horrible,” she said, “but at least he had the guts to face a problem and stick with it, however much hatred his policies generated.” Turnout is expected to be low by Portuguese standards. | If she were forced to vote on Sunday, Ms. Pimenta said, it would probably be for Mr. Passos Coelho’s slate. “The austerity cuts have been horrible,” she said, “but at least he had the guts to face a problem and stick with it, however much hatred his policies generated.” Turnout is expected to be low by Portuguese standards. |
| “I think that people here now realize that to get back what has been invested to repair an economy, you need a certain amount of time,” said Jörg Heinermann, a German auto executive in Lisbon who heads the German-Portuguese Chamber of Commerce. “Portugal could become the proof that even a government that pushes through very tough austerity measures can win re-election.” | “I think that people here now realize that to get back what has been invested to repair an economy, you need a certain amount of time,” said Jörg Heinermann, a German auto executive in Lisbon who heads the German-Portuguese Chamber of Commerce. “Portugal could become the proof that even a government that pushes through very tough austerity measures can win re-election.” |
| Mr. Passos Coelho is already the first Portuguese prime minister to lead a coalition through a full term in office since democracy was restored here in 1974 after four decades of dictatorship. | Mr. Passos Coelho is already the first Portuguese prime minister to lead a coalition through a full term in office since democracy was restored here in 1974 after four decades of dictatorship. |
| There have been setbacks along the way. Some of Mr. Passos Coelho’s economic proposals have been blocked in court, and no buyer has yet been found for the state transportation companies or for a bank that the state rescued from the collapse of the Espírito Santo family’s business empire. Saving that bank ballooned the country’s 2014 budget deficit to 7.2 percent of gross domestic product, from a projected 4.5 percent. | |
| If neither side emerges with a clear governing majority on Sunday, Portugal faces “the risk of medium-term deadlock,” according to a report by Antonio Barroso, an analyst in London for Teneo Intelligence, a research organization. | If neither side emerges with a clear governing majority on Sunday, Portugal faces “the risk of medium-term deadlock,” according to a report by Antonio Barroso, an analyst in London for Teneo Intelligence, a research organization. |
| Mariana Mortágua, an economist and a leader of the Left Bloc party in Portugal, acknowledged that “it’s a problem that the left hasn’t been able to put forward one program and one solution.” In fact, she said, “the Socialist Party hasn’t offered people a credible alternative because they keep saying that they reject austerity, but at the same time they accept the fiscal rules of Europe, and don’t even talk about debt restructuring.” | Mariana Mortágua, an economist and a leader of the Left Bloc party in Portugal, acknowledged that “it’s a problem that the left hasn’t been able to put forward one program and one solution.” In fact, she said, “the Socialist Party hasn’t offered people a credible alternative because they keep saying that they reject austerity, but at the same time they accept the fiscal rules of Europe, and don’t even talk about debt restructuring.” |
| That ambivalence has played into the governing party’s hands, she said. “It’s clear that the country is now in a worst position than before the crisis, and there’s more poverty,” Ms. Mortágua said, but they’ve managed — in a very smart way, I’ve got to admit — to give the impression that austerity is a success.” | That ambivalence has played into the governing party’s hands, she said. “It’s clear that the country is now in a worst position than before the crisis, and there’s more poverty,” Ms. Mortágua said, but they’ve managed — in a very smart way, I’ve got to admit — to give the impression that austerity is a success.” |
| Among the protest signs stacked in the Left Bloc party’s headquarters was one reading, “A country doesn’t sell itself,” a reference to the government’s sale of major insurance and energy assets to Chinese and other foreign investors under pressure from Germany and other creditors. | Among the protest signs stacked in the Left Bloc party’s headquarters was one reading, “A country doesn’t sell itself,” a reference to the government’s sale of major insurance and energy assets to Chinese and other foreign investors under pressure from Germany and other creditors. |
| And while Portugal’s property market has been revived by foreign investors who get tax breaks and special residency visas, activists on the left cite studies by Oxfam and other poverty-fighting groups that indicate that Portugal has one of the highest levels of income inequality in Europe. | And while Portugal’s property market has been revived by foreign investors who get tax breaks and special residency visas, activists on the left cite studies by Oxfam and other poverty-fighting groups that indicate that Portugal has one of the highest levels of income inequality in Europe. |
| Going into the weekend, the election seemed too close to call, but officials of the ruling party were already pleased at having apparently shed some of the stigma of austerity. | Going into the weekend, the election seemed too close to call, but officials of the ruling party were already pleased at having apparently shed some of the stigma of austerity. |
| “The overwhelming opinion in the past two years was that the government would lose because you could not win with austerity measures,” said Miguel Poiares Maduro, a government minister. “But I think we’ve now allowed people to see that their sacrifices made sense. I think the Portuguese people have understood that austerity was not a choice, but a necessity that we had to go through.” | “The overwhelming opinion in the past two years was that the government would lose because you could not win with austerity measures,” said Miguel Poiares Maduro, a government minister. “But I think we’ve now allowed people to see that their sacrifices made sense. I think the Portuguese people have understood that austerity was not a choice, but a necessity that we had to go through.” |