Portugal could make history by becoming the first eurozone bailout country to re-elect a government that imposed harsh and unpopular austerity measures when it votes this weekend.



Final polls suggest the centre-right ruling coalition is on course to win Sunday’s general election after a close-run campaign, although it appears likely to lose its absolute parliamentary majority.

The incumbent prime minister, Pedro Passos Coelho, who implemented severe austerity measures, including cutting pay and pensions, slashing public services and introducing the largest tax hikes in living memory, argued on the campaign trail that he was the only one to be trusted to protect the fragile economy as it emerges from years of recession.

“If we stay on the path we’ve been following, we won’t need any more bailouts,” he said, as his Social Democratic party ran on a joint ticket with its coalition partner, the smaller, conservative Popular party.

But Portugal has not seen such a tight-run election since it became a democracy in 1974, after 48 years of dictatorship.

The opposition centre-left Socialist party, led by the popular former mayor of Lisbon, Antonio Costa, has pledged to ease back on austerity and boost households’ disposable income.

Costa is also a moderate who is keen to abide by Europe’s budget deficit rules. He accused Passos Coelho of going even further than bailout requirements and applying his own brand of “excessive austerity”. He said: “Now’s the time to turn the page on austerity. Our goal is to ease the tax burden.”

In 2011, Portugal became the third eurozone country after Ireland and Greece to be bailed out. Four years later, it has left the bailout scheme but only after implementing stringent austerity measures in return for funding. There have been steep tax-increases, deep cuts in welfare rights, pay and pensions as well as changes to labour entitlements. After three years of recession the economy has grown this year .

But despite the beginnings of a fragile economic recovery, Portugal remains heavily in debt and vulnerable. Unemployment is still painfully high at 12%, rising to 30% among young people. Living standards have fallen sharply in what is still western Europe’s poorest nation. One in five people continue to live below the poverty line with an income of less than €5,000 (£3,684) per year. Health and education services have been affected by cuts.

Emigration has also become a major campaign issue. A total of 485,000 people left Portugal between 2011 and 2014, the highest emigration rate in over 50 years in a country whose total population stands at around 10 million. The recent exodus has surpassed the wave of Portuguese emigration in the 1960s that saw an unskilled labour force leave. This time, there has been a mass exodus of qualified youth, including scientists, doctors and nurses.

Even though austerity was at the heart of the election campaign, Portugal has not been part of the new wave of anti-establishment, anti-austerity protest parties such as Spain’s Podemos, or Greece’s Syriza.

This is partly because in Portugal, where moderate centrist parties have traditionally held power in recent decades, there is a broad spectrum of established parties on the left occupying the radical space, including the long-established Communists, who usually take between 7 and 9% of the vote.

“Another reason we don’t have a new protest party is that the abstention rate in Portugal is around 40 – 43%,” said António Costa Pinto, political science professor at the University of Lisbon. “Those who are suspicious of the political class are more alienated from politics and rather than turn towards a new protest party, they tend to drop out and not vote, particularly young people.” The abstention rate in Sunday’s vote is expected to be high.

It remains to be seen what impact the legal tribulations of the previous Socialist prime minister, José Sócrates, will have on voters. Sócrates, who was in charge when Portugal had to ask Europe and the IMF for a bailout in 2011, was jailed on remand in November 2014 on suspicion of corruption and money laundering, and is currently under house arrest. He denies the allegations.