- The Washington Times - Tuesday, March 19, 2002

LISBON Portugal has become the latest European Union country to shift to the right after conservative parties narrowly won parliamentary elections on pledges to revive the faltering economy.

The Social Democratic Party defeated the incumbent center-left Socialists by less than 3 percentage points in Sunday's election. That victory, combined with the third-place finish of the conservative Popular Party, gave conservatives a slim parliamentary majority for the first time in seven years.

Social Democrats won 102 seats and the Popular Party 14, giving conservatives 116 of the 230 total.

Social Democrat leader Jose Durao Barroso, expected to become the new prime minister in April, said Portuguese voters expressed "a desire for change" after the Socialists "led Portugal into extreme difficulties."

"A new era has begun today. I hope it will bring a richer and fairer country," he said.

The Social Democrats have pledged to cut corporate taxes, slash public spending and sell off some state companies. Share prices on the Lisbon stock exchange rose by almost 1 percent yesterday, outperforming other European markets.

The Socialist Party, in power for six years, won 95 seats.

"We lost, but we lost honorably," Socialist leader Eduardo Ferro Rodrigues said. He pledged to fight any Social Democrat attempt to reduce welfare benefits.

The international economic slowdown exposed fundamental flaws in Portugal's economy, raising concerns that it squandered about $26.4 billion in EU development aid distributed since 1989.

Under the Socialists, the public sector inflated to more than 700,000 employees, or about 15 percent of the country's work force.

Meanwhile, the quality of public services deteriorated. Courts have huge case backlogs, most hospitals are overcrowded, and long lines to obtain documents are common at public offices.

The Lausanne, Switzerland-based Institute for Management Development last year described Portugal as the least attractive EU country for investment.

Portugal also has the lowest worker-productivity rate and education standards in the 15-nation European Union.

About 60 percent of the country's 8.5 million registered voters cast ballots Sunday.

Final results will not be known until March 27 after postal ballots from abroad are counted. Those votes represent four seats.

The Social Democrats' narrow victory margin means they may have to form a coalition with the Popular Party to push laws through Parliament. Past attempts at an alliance have failed because of feuding between their leaders.

Portugal's shift to the right mirrored election results in fellow EU members Denmark and Italy during the past year.

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