LISBON, Portugal (AP) — A frequent question asked in Portugal ahead of Sunday’s general election is not whether the incumbent Socialist Party will win, but by how big a margin. Recent opinion polls suggest the Socialists enjoy a 10-percentage-point lead. That’s largely thanks to an economic recovery and deep divisions in the main opposition Social Democratic Party. Here’s a look at what’s happening:
WHAT’S THE VOTE FOR?
Portugal’s 10.8 million eligible voters are electing 230 lawmakers to the Republican Assembly, as the Portuguese parliament is called. Those lawmakers then vote on a proposed government, usually put forward by the party with most seats in parliament. The government serves for a four-year term, with the country’s president mostly a figurehead. The center-left Socialists and the center-right Social Democrats are the main parties. If Sunday’s winner fails to secure a majority in parliament, it can form a minority government or seek alliances with smaller parties to ensure its legislative proposals have enough votes to pass. Smaller parties in the outgoing parliament whose candidates are likely to be re-elected are the radical Left Bloc; a Portuguese Communist Party/Green Party alliance; the conservative Christian Democratic Party, and the People-Animals-Nature Party.
The two leading candidates for prime minister are incumbent Socialist leader Antonio Costa and his Social Democrat challenger Rui Rio.
Costa, 58, is a wily political operator. After losing the 2015 general election, he turned the tables on the victorious Social Democrats and secured enough parliamentary seats to take power by negotiating an unprecedented alliance with the Portuguese Communist Party and the Left Bloc. Previously, Costa held Cabinet posts in three governments and served two consecutive terms as mayor of the capital, Lisbon.
Rio, 62, is a former mayor of Porto, Portugal’s second largest city in the north and Lisbon’s traditional cultural and industrial rival. An economist, he has served as a lawmaker but has never held a government post. As Social Democrat leader since Jan. 2018, he has struggled to contain his party critics.
It’s the economy. The Social Democrats’ last term in power is still associated in the public mind with cutbacks and a three-year recession that ended in 2014. The downturn followed Portugal’s 78 billion-euro ($85.6 billion) bailout in 2011, after a Socialist government had allowed the budget deficit to balloon above 11%. Under Costa’s Socialists, growth has climbed from 0.2% in 2014 to 2.1% in 2018, while unemployment has fallen by half to around 6%. The budget deficit, meanwhile, is now close to zero under the stewardship of Finance Minister Mario Centeno, who also chairs meetings of finance ministers from the 19 countries using the euro currency. Furthermore, Costa reversed some unpopular austerity measures, restoring four public holidays and slashing sales tax on restaurant meals to 13 percent from 23 percent.
WHAT DO ITS RIVALS SAY?
The Socialists’ insistence on slashing the budget deficit has starved public services of cash, increasing waiting times for appointments in the national health service. Public transport has suffered from a lack of investment. Also, income tax rates are at a record high. The Social Democrats vow to lower them. Critics say the Socialist government has benefited from favorable, but temporary, conditions: a tourism boom, partly due to problems at rival destinations, and historically low interest rates in Europe. The Socialists have also come under fire in a series of recent scandals, including a controversy over family connections in senior government posts.
WHAT PROBLEMS NEED FIXING?
Though government spending is now more in line with revenues, Portugal’s government debt is equivalent to more than 120% of GDP — the third highest in the European Union. And the combined government, private and corporate debt is more than three times the country’s GDP, the Bank of Portugal says. If European interest rates rise, the Portuguese could find themselves in big trouble. Other challenges include climate change, as rainfall in the southern half of the country dwindles, and an aging population that threatens the financing of the welfare system. The EU says that at current fertility rates the number of Portuguese will decline from 10.3 million this year to 6.6 million in 2100.