Voters reject Portugal austerity policies in local elections

Portugal's opposition Socialists inflicted a stinging defeat on the Social Democrats in local elections as voters displayed their frustrations at the government's austerity measures. Prime Minister Pedro Passos Coelho admitted his conservative Social Democrat party's "national defeat" in the municipal polls Sunday, which saw them lose control of the major cities of Porto, Sintra and Vila Nova de Gaia to the Socialists, according to partial results. The oposition Socialists also retained power in the capital Lisbon, with an increased share of the vote. "We had the goal of retaining the majority of town halls but that didn't happen," Passos Coelho said, congratulating the opposition Socialists for their "significant victory". "As Prime Minister I will continue along the path we are on, which is essential in order to overcome the economic crisis and restore confidence and growth for Portugal," the prime minister insisted. "The SDP has suffered its worst results in municipal elections," he said, calling the defeat the "price to pay" for the government's austerity policies. According to partial results covering nearly 90 percent of the constituencies, the Socialists won 36.7 percent of the vote with the Social Democrats garnering just 18.9 percent. That translates into 130 municipalities for the Socialists against 90 for the SDP and its allies, with another 40-plus results to come in. At the previous municipal elections in 2009, the SDP, together with allied right-leaning parties, won a majority of the municipalities, securing 139 against 132 for the Socialists, who nonetheless won more individual votes. The elections were seen as the first test of the austerity policies championed by the two-year-old centre-right coalition government. In exchange for a 78 billion euro ($105 billion) rescue package in May 2011, Portugal's government has imposed tax hikes and wage and pension cuts in a bid to balance the budget, aggravating a downturn that has sent unemployment to a record 17.7 percent at the beginning of this year. Despite growing discontent, the government has largely pushed forward with measures to repair public finances as it seeks further disbursements of bailout funding. However, voters appeared to take their revenge on Sunday. In Lisbon, the Socialist mayor Antonio Costa won a third term by a wide margin, securing more votes than in the last municipal election in 2009. He garnered between 51 and 55 percent of the vote according to exit polls conducted by the Catholic University for the public television channel RTP. In 2009, he scored 44 percent. In a surprise result in Porto, independent candidate Rui Moreira beat off challenges from the SDP's Luis Filipe Menezes and Socialist Manuel Pizarro. In Vila Nova de Gaia, usually a stronghold of the right on the outskirts of Porto, the Socialists' Eduardo Rodrigues won with 38-42 percent of the vote. Among those who backed the Socialists was economics teacher Alda Camara. "Passos Coelho is a mere puppet of (German Chancellor) Angela Merkel. They (the government) are making savings affecting children," she told AFP.  "There are classes in Portugal now without a teacher." Some 9.5 million people were eligible to elect representatives for 308 city halls. The vote came as auditors from the "troika" of the International Monetary Fund, the European Commission and the European Central Bank are in Lisbon to review Portugal's progress and decide whether to release a 5.5 billion euro loan instalment. Prior to the vote, Passos Coelho insisted that "the municipal election results will have no effect on national policy." But he conceded Sunday that "even if this is not a national election, the results of the local vote must be considered at a national level."