September 17, 2015 / 12:38 PM / 3 years ago

Portuguese PM and Socialist opponent clash over austerity as election nears

LISBON (Reuters) - Portugal’s prime minister and his Socialist opponent argued about austerity on Thursday in their last debate before the Oct. 4 general election, and analysts said the premier gained an edge although the result is too close to call.

A screen shows images of Portugal's Prime Minister Pedro Passos Coelho and Antonio Costa, the leader of the opposition Socialist party (PS), before their broadcast debate in Lisbon, Portugal, Portugal, September 17, 2015. REUTERS/Rafael Marchante

During the mid-morning radio debate, Prime Minister Pedro Passos Coelho said his Socialist opponent’s proposals to simply end austerity could lead to a repeat of the 2011 bailout by the European Union and the International Monetary Fund.

“Your demagoguery clashes with reality,” Passos Coelho told Socialist leader Antonio Costa.

Passos Coelho’s centre-right ruling coalition has recently overtaken the Socialists in an opinion poll but the surveys suggest neither side would be able to form a majority government. A new poll is expected on Friday.

“Passos Coelho was able to corner Costa on the Socialist program, whose proposals were more under fire than the coalition’s,” said Antonio Costa Pinto, political scientist at the Lisbon University. An online poll by Diario Economico newspaper showed Passos had won the debate with 58 percent.

Analysts said that Costa had failed to explain how he was going to produce 1 billion euros ($1.1 billion) in social security savings and failed to say if his party was ready to discuss pensions reform, regardless of who wins, as proposed by the premier.

Portugal’s bailout program, which it completed in May 2014, has not fired up the degree of mass resistance that produced radical anti-bailout parties in Spain or Greece.

The two top prime ministerial candidates held a television debate last week but no polls have been released since then to indicate whether either pulled ahead.

Socialist Costa, the former mayor of Lisbon, proposes to boost incomes, hiring and growth in order to cut the deficits while scrapping austerity measures and cutting taxes, asserting that would still allow deficits to reduce in line with European rules.

Passos Coelho said tight budget controls remain essential. “Responsible governments cannot go promising to people what the reality won’t allow them to implement,” he said.

The economy climbed out of a three-year recession last year and Lisbon has already repaid the IMF some of the rescue funds.

“If we follow the path we’ve been on until now, we will not need a fourth bailout” since the late 1970s, Passos Coelho said, reminding the Socialists that it was their administration that had to seek the bailout.

Additional reporting by Daniel Alvarenga, editing by Axel Bugge/Euth Pitchford

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