Portugal's Socialist party nominee and Deputy Prime minister Jos? Socrates reacts at the general election in Lisbon, June 5, 2011.
Credit: Reuters/Hugh CorreiaBy Shrikesh Laxmidas and Sergio GoncalvesLISBON | Sun, June 5, 2011 at 8: 49 pm EDT
Lisbon (Reuters)-Portugal's centre-right Social Democrats (PSD) scored a convincing victory over Social Democrats in an election on Sunday, punish the outgoing Government for a 78 billion bailout that will entail far-reaching austerity.
The election will end months of political uncertainty which began with the Socialist Government in March and led Lisbon becomes the third country in the euro area to seek a Bailout for Greece and Ireland.
The results showed the PSD won 105 seats, or 39 percent of the vote, while the fact right CDs party received 24, so that the two traditional allies of the Government has a strong majority in Parliament has 230 seats. The Socialists won 73 seats, 24 less than in the last election.
-I will direct all of my efforts as quickly as possible to ensure the country and Portuguese will gain a majority government led by the PSD, which provides stability for the next four years, said Passos Coelho his party after the election.
CDs leader Paulo Portas said he was ready to join with the Social Democrats, to let the incoming Government to implement the austerity measures agreed with the European Union and the International Monetary Fund as part of the rescue package.
"It showed unequivocally will open a window for confidence and hope for the future," said Passos Coelho.
The election results showed that many Portuguese blamed the Socialists, in power for six years, for the country's economic crisis.
-It is a profit that displays a large red card to Jose Socrates, who left the country on its knees, "said Julio Peixoto, 43, carrying a giant flag outside the PSD party's election campaign headquarters in Lisbon.
Socrates, who resigned as Prime minister in March after his Government failed to pass the austerity measures but stayed on as Deputy, said he was responsible for the defeat and quit as Socialist Party Chief.
PSD TO HONOR BAILOUT TERMS
Passos Coelho said his Government is committed to the terms of the action from the European Union and the IMF.
He said he wanted to Portugal "to win back the confidence of markets that are essential for the country itself to restore."
A centre-right Government will be welcomed by investors, who have lost faith in Portugal's assets in recent months, dumping its bonds and postpone prices into euros-era highs.
"This result will be seen as positive by the markets and investors," said Filipe Garcia, Director of the de Informacao Mercados Financeiros consultants in Porto. "It sounds for stable Government that can be full mandate and it is positive."
Socrates ' minority Government collapsed halfway through its term of Office, weighed by its inability to pass legislation in Parliament that the sovereign debt crisis worsened.
"This great victory will avoid a political impasse, which is what led the Socrates Government to fall--failed to pass important legislation," said Garcia.
A centre-right coalition Government should rapidly implement reforms and austerity measures included in the action, as sweeping tax rises and deep spending cuts, reducing Portugal's large deficits and debt.
Still, Portugal is facing record levels of unemployment in three decades, the economy is expected to contract 2 percent both this year and next, will present the new Government with tough challenges that disposable income falls and austerity is taking its toll.
So far, few strikes or protests against austerity measures in Portugal, unlike Greece and neighbouring Spain, but analysts say that could change as the recession deepens.
(Additional reporting by Andrei Khalip, Daniel Alvarenga, Catherine Macdonald and Miguel Pereira. By Axel Bugge. editing by Angus MacSwan)
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