Friday, September 21, 2012

Portugal Social Democrats' support hits record low - poll

By Daniel Alvarenga and Axel Bugge

LISBON/PORTO (Reuters) - The popularity of Portugal's ruling Social Democrats has slumped to a record low, an opinion poll showed on Thursday, prompting calls from business leaders for a rethink on deeply unpopular austerity measures.

The Social Democrats received 24 percent support, down from 36 percent in June, putting the party well behind the opposition Socialists.

Yet the Diario de Noticias daily poll came as a warning to both top political parties, with gains going to small leftist parties which oppose the country's IMF/European Union bailout and the austerity measures that come with it.

While the Socialists slipped to 31 percent from 33 percent, the Communists saw their support rise to 13 percent from 9 percent in the last poll and the Left Bloc rose to 11 percent from 9 percent.

The rightist CDS party, part of the Social Democrats' ruling coalition, edged up to 7 percent from 6 percent.

Traditionally opposition to higher taxes, some analysts have said the government's tax hikes have strained their ties with the Social Democrats.

Portugal had managed to comply with the bailout with relatively little opposition but mass protests have erupted since the government on September 7 announced it would raise social security contributions for all workers to 18 percent from 11 percent in 2013.

That undermined the political consensus which until then was supportive of Portugal's 78 billion euro ($101 billion) EU/IMF bailout.

Speaking to a conference in Porto, Fernando Ulrich, chief executive of the country's third-largest private bank BPI, said the measure was rational from an economic point of view, but would be worthless if it undermines social cohesion.

"It is obvious that it provoked a very strong social reaction and that's more important than the technical merits. The most important point for Portugal has been its social cohesion ...It is more important than the economic rationale."

Luis Reis, board member of retailer Sonae, Portugal's largest private sector employer, said he hoped the government would revise what he said was an "experimental measure", though he acknowledged additional austerity measures would be needed to reach the country's budget goals.

"We think that the global impact of the measures as it was announced by the government were not well-evaluated ...and it is certain that companies linked to domestic demand will be affected."

"We believe that the recent statement of readiness by the government to revise the levy can bear fruit," Reis said.

Austerity has pushed Portugal into its worst recession since the 1970s but the government has defended its actions.

It has said it is willing to "calibrate" the tax rise, but said alternative austerity moves would also hurt consumption.

Nearly half of those surveyed in the poll, 48 percent, said they thought there was a high probability that Portugal would "live through a situation identical to Greece" in the next one to two years. That was up from 34 percent who thought that scenario was likely in the previous poll.

Greece's debt crisis has sent the country into recession for five years and sparked mass protests. Portugal has been in recession for two years and strikes and protests have been infrequent, although unemployment is at record high levels.

Still, hundreds of thousands of Portuguese took to the streets to demonstrate against the tax hikes on Saturday in the biggest public protest since the country received its bailout last year.

The poll was conducted by pollsters at Lisbon's Catholic University on September 15-17. It surveyed 1,132 people and had a margin of error of 2.9 percentage points.

(Writing By Andrei Khalip, editing by Jane Merriman and Jason Neely)

News

Friday, September 21, 2012

Portugal Social Democrats' support hits record low - poll

By Daniel Alvarenga and Axel Bugge