Socialists now have incentive to govern alone rather than seeking formal alliance

Portugal’s Socialists won Sunday’s general elections but fell short of an absolute majority, leaving the prime minister, António Costa, needing to negotiate a delicate new alliance with the far-left parties that backed him last time around.

Cementing a modest and partial recovery for Europe’s centre-left after a disastrous few years of fallout from the 2008 financial crisis, the Socialists won 106 seats, up from 86 in the previous parliament, against 77 for the opposition centre-right Social Democrats (PSD), their worst result since 1983.

The result left Costa 10 short of a majority in the 230-seat assembly and the prime minister, who since 2015 has led a minority government with the support of the Left Bloc and the Communists in an unlikely alliance known as the geringonça or “odd contraption”, said he was likely to “renew the experience”.

The result showed the Portuguese “like this political solution”, he said. “The Socialist party has clearly won this election and strengthened its position. Stability is essential for Portugal’s international credibility and for attracting investors. We will strive to find solutions that ensure this stability for the entire legislature.”

The Left Bloc, which held the 19 parliamentary seats it won four years ago, and the unreconstructed Portuguese Communist party, which won 12 seats, five fewer than in the last vote, said they were prepared to back the Socialists again – but laid down demands for wage increases, greater public spending and improved labour laws.

Alternatively, Costa could seek a tie-up with the People-Animals-Nature party, which rode a wave of increasing environmental concern to capture four seats, and Free, an eco-socialist breakaway from the Left Bloc, which elected a single MP.

“These negotiations could be more complex than four years ago when the pact on the left was cemented by their common goal to unseat the right,” said one political scientist, António Costa Pinto, who predicted government negotiations could take several weeks and involve more participants.

A strengthened Socialist party has, in any event, a wider array of options to get laws approved in parliament, the political analyst Pedro Norton told the public broadcaster RTP. “This is an incentive for it to govern alone, by seeking ad hoc agreements” for specific votes rather than sealing a formal alliance, he said.

The result reinforces something of a recent upturn for Europe’s centre-left. After Sweden’s Social Democrats managed to remain the country’s largest party last year and – a greater challenge – to form a government afterwards, the centre-left came first in Finnish elections for the first time in 20 years.

Voters returned the third left-leaning government in a year to the Nordic region as Denmark’s Social Democrats claimed victory in parliamentary elections in June, while in Italy the Democratic party finds itself unexpectedly back in government after a strategic blunder by the leader of the far-right League, Matteo Salvini.

European Socialists were quick to celebrate. “Portuguese society again chooses stability, equality and social justice,” said Pedro Sánchez, the Spanish prime minister. “With the victory of the Socialist party, they are betting on a project of the left, progressives and modernisers. Let’s continue working together for a fairer Europe.”

Celebrations were tempered, however, by the election in a country long thought immune to the rise of Europe’s far right of an MP from a new nationalist formation, Chega! or Enough! – the first time a far-right party has won a seat in Portugal’s parliament since the end of the Salazar dictatorship in 1974.

After finishing second in the 2015 election and cobbling together his geringonça, Costa reversed unpopular austerity measures, including cuts to public sector wages and pensions, introduced by the previous PSD-led government while still managing to bring Portugal’s budget deficit down to nearly zero.

He has won praise at home and in Brussels for combining fiscal discipline with successful measures to stimulate the economy, which is growing faster than the EU average helped by rising exports and a booming tourism industry that attracted more tourists to Portugal last year than it has inhabitants.

Polls had suggested Costa might win an absolute majority, allowing the Socialists to govern alone, but his lead was eroded by a series of scandals, including the former Socialist defence minister, José Azeredo Lopes, being charged with abuse of power and denial of justice over his role in the alleged cover-up of a 2017 arms theft.