Portugal's ruling Socialists win surprise majority in snap election

Against expectations, Portugal's ruling center-left Socialists won an outright parliamentary majority to govern in Sunday's snap general election, which also saw gains for the far right.

Having been badly hit by the pandemic, Portugal sought a stronger government that would be better able to deploy $18.7 billion of pandemic recovery funding the country is set to receive from the European Union.

The result ensures stability and gives a strong mandate to Prime Minister Antonio Costa, who is known to be an advocate of balanced public accounts, said the Reuters news agency.

The election was called in November after Costa's left bloc allies joined those on the right in rejecting the minority government's budget proposal. Costa had said he would not put deficit targets at risk under pressure from leftwing partners.

The Socialist Party, which had lost much of its lead in recent opinion polls, won 117 seats in the 230-seat Parliament, up from its previous total of 108. The main opposition center-right Social Democrats won 71 seats. Far-right party Chega won 12 seats and will be the third largest party in Parliament.

Pre-election polls had forecast a much closer race. The Financial Times said voters had chosen to penalize the far-left parties that triggered the election. Exit polls indicated that the far-left parties, including the anti-capitalist Left Bloc, and the Communist Party, had suffered heavy losses.

Speaking after his victory, Costa said: "An absolute majority doesn't mean absolute power. It doesn't mean to govern alone. It's an increased responsibility and it means to govern with and for all Portuguese."

An economist in Porto told Reuters that investors would welcome Costa's stronger mandate enabled by the result. Filipe Garcia, the head of consultants Informacao de Mercados Financeiros, said: "The Socialists will not need to compromise (with other parties), which guarantees stability and a clear line of action. The biggest challenge will be to promote potential growth."

The FT noted that Pedro Sanchez, Spain's Socialist prime minister, congratulated Costa on his win, saying the outcome would allow the Iberian neighbors to "deliver a socialist response" to Europe's challenges.

The vote took place despite a surge of novel coronavirus cases, caused by the Omicron variant. Agencies reported that around one million people with COVID-19, or one-tenth of Portugal's population of 10.3 million, were given government permission to leave isolation to cast their ballots.