Socialists retain power in Portugal elections

Lisbon, Portugal - With over 98 percent of votes counted, the incumbent Socialists had 36.5 percent compared with 29 percent for the center-right Social Democratic Party, the main opposition party.

Three smaller parties also secured seats in Parliament. The conservative Popular Party polled 10.5 percent while the more radical socialist Left Bloc had almost 10 percent and the Communist/Green coalition almost 8 percent. Fringe parties took other votes but likely had too few to earn seats in Parliament. The turnout was 60.5 percent.

Prime Minister Jose Socrates, the Socialist leader, has pledged big-ticket public works projects to stimulate growth amid forecasts the economy will contract by as much as 4 percent this year. Some 500,000 people -- just over 9 percent of the work force -- are unemployed.

The Social Democrats proposed fighting the economic crisis by facilitating private investment. They rejected a stimulus package of state investment, saying public works will saddle future generations with debt.

Conceding defeat, Social Democrat leader Manuela Ferreira Leite said her party would continue to oppose the Socialist spending plan in the single-chamber Parliament.

"The Social Democratic Party won't keep quiet nor will it be intimidated," she said.

Socrates has blamed Portugal's economic woes on the global meltdown, and vowed to stick with a modernizing social and economic reform program that has antagonized many, especially trade unions.

The Socialists are ready to spend euro5 billion ($7.3 billion) on a new Lisbon airport, euro3 billion ($4.4 billion) on a bullet train link to Spain and euro1.7 billion ($2.5 billion) on a road and rail bridge across the River Tagus at Lisbon.

The Socialist government in the past four years imposed a series of widely contested reforms aimed at boosting the economy in Portugal, which has lagged behind others in the European Union despite receiving billions in EU development aid since joining the bloc in 1986.

The reforms have included raising the civil service retirement age from 60 to 65 and introducing an evaluation system for schoolteachers. The Socialists are also credited with placing Portugal among the continent's pioneers in the development of clean energy and electric cars, and Socrates has put hundreds of thousands of computers in schools.

Portugal remains western Europe's poorest country, however, with some of the lowest productivity and education levels, and about a third of workers taking home less than euro600 ($880) a month after tax.

The country is shackled by labor laws introduced by radical leftist governments after the 1974 Carnation Revolution ended a four-decade dictatorship.

Ferreira Leite, the Social Democrat leader who was seeking to become Portugal's first elected woman prime minister, also proposed reforms but said they must go deeper and pursue broader consensus.

Before the 2005 Socialist win, Portugal had three governments in three years. Only one minority government has survived its full term since democracy was introduced 33 years ago.

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