Portugal's ruling centre-right wins austerity-test election

Prime Minister Pedro Passos Coelho's "Portugal Ahead" coalition was on 39.16 percent of the vote, according to results from more than three-quarters of constituencies, with the opposition Socialists of former Lisbon mayor Antonio Costa trailing by more than seven points.
 
Costa, who campaigned on a promise of easing some of the painful reforms imposed on western Europe's poorest country, was quick to concede defeat but ruled out stepping down as party leader.
 
"The Socialist Party did not achieve its stated objectives, and I take full political and personal responsibility," Costa told supporters in the capital.
 
But he added: "I will not be resigning."  

Oct.4 victory by the centre-right, despite four years of swinging austerity that sent unemployment and emigration soaring, marks a rare case of a bailed-out country re-electing its government.
 
The coalition between the prime minister's Social Democrats and the conservative Popular Party needs 116 seats to control the 230-seat chamber, with early indications pointing to it falling just short.
 
Passos Coelho campaigned on his record of having returned the country to fragile growth after one of the worst crises in its history, warning that the opposition Socialists could undo the progress.    

His triumph at the polling booth could signal a turning of the tide in Europe, with the austerity governments of eurozone Spain and Ireland about to face their electorates in the coming months.
 
"We have had very tough times in past four years, with a lot of sacrifices. I am confident in the work I have done," Passos Coelho told journalists after voting in a Lisbon suburb.
 
His coalition, in power since 2011, had trailed Costa's Socialists in the polls until July.
 
The Socialists had vowed to roll back the tough reforms they claim went further than creditors demanded, but many believe they lost the propaganda battle.
 
"The right has succeeded in getting across the message that returning the Socialists would lead the country to bankruptcy," political scientist Antonio Costa Pinto told AFP.
 
Other analysts warned that if there was no clear victor Portugal risked a period of instability that could endanger its fragile recovery.
 
Costa, a fearsome negotiator, could block a minority centre-right government by joining forces with the Left Block and the Communists, who between them were on course for 16 percent support.
 
The biggest winner was voter apathy, with provisional figures suggesting a record 44.42 percent of abstentions.    

"Nothing will change anyway, austerity will continue," said Manuel Augusto, 75, who said he voted for the Socialists.            

Passos Coelho, a 51-year-old economist, campaigned on his record of having navigated Portugal safely through the debt crisis and to a return to growth last year after three years of recession.
 
When he came to power, Portugal was on the verge of defaulting on its debt mountain.
 
His Socialist predecessor, Jose Socrates, had just asked for a 78 billion euro ($88 billion) bailout from the European Union and the International Monetary Fund.
 
Portugal exited the bailout scheme in May 2014, but only after harsh austerity measures and the biggest tax hikes in living memory.
 
The jobless rate has since fallen to 12 percent from a peak of 17.5 percent at the beginning of 2013.
 
But the recovery has yet to be felt on the streets. One in five Portuguese continue to live below the poverty line with an annual income of less than 5,000 euros ($5,600).
 
Unlike Spain or Greece, Portugal has not seen the rise of a protest movement strong enough to challenge traditional parties.
 
"The attempt by Greece's Syriza party to put an end to austerity has failed. Suddenly Portuguese voters see that there really is no alternative" to austerity, political analyst Jose Antonio Passos Palmeira told AFP.
 
While the Socialists pledged to lower personal taxes and reverse public sector pay cuts, they promised to stick to European budget rules.
 
Party leader Costa, 54, has been hamstrung from the outset by scandal-hit predecessor Socrates, who served as premier from 2005-11.    

Socrates, 58, is under house arrest on suspicion of corruption and money laundering.