Socialists prepare to govern

Date: 05/10/1995

By Rory Watson

PORTUGUESE Socialists are preparing to form a government whose main priority will be a firm commitment to monetary union and a single currency after their best-ever general election result ended ten years in opposition.

The Socialist Party's leader Antonio Guterres will be asked to put together his governing team by President Mario Soares once the results of the eight remaining seats - four for Portuguese living abroad and four in the north of the country boycotted by voters in last Sunday's general election - are known on 11 October.

Guterres will become the seventh Socialist prime minister in the European Union, joining political soul mates in Spain, Denmark, Finland, Sweden, Greece and the Netherlands. Socialist parties are also in coalition in Ireland and Luxembourg.

A 46-year-old engineer, who took over the party leadership in 1992, Guterres is a conservative on economic policy. He is committed to keeping a tight hold on budget spending and inflation in a bid to ensure that Portugal meets the convergence criteria for a single currency by the end of the century. At home, he will champion more spending on education and minimum social security payments for the needy.

The Socialists emerged with 44&percent; of the vote and 109 seats in the 230-member parliament after Sunday's vote, well ahead of the 83 seats (down from 135) retained by the outgoing ruling centre-right Social Democrats, as the electorate went to the polls for the 27th time in just 21 years.

The other winner was the right wing, anti-European Union Popular Party which trebled its parliamentary representation to 15 members, equalling the Communists. The party campaigned on a tough-talking, nationalist platform, directing its attacks at the Maastricht Treaty and the EU in general.

Guterres accepts he will not have an absolute parliamentary majority, but is confident that the fragmentation of the opposition stretching from Marxists to right-wing nationalists will make it almost impossible for them to find common cause to oust the minority government.

Observers expect little change in Portugal's approach to the EU with the departure of former premier Anibal Cavaco Silva, who had been at the helm since the country joined the Union in 1986. Portugal is a major recipient of EU funds, which have had a major impact on economic development. Both Guterres and his PSD rival Fernando Nogueira offered the electorate free market policies and backed closer European integration.

The Socialists' win had been widely predicted by opinion polls. But the scale of their success and their economic programme, with the prospect of a tight 1996 budget and continued privatisations, reassured financial markets. Earlier these had feared the future offered a weak minority government and instability.