That was the easy bit

By The Economist online | LISBON

JOSÉ SÓCRATES, Portugal's prime minister, has become the latest European socialist to fall victim to the euro zone's debt crisis after his party's decisive defeat by right-wing opposition parties in yesterday's snap general election.

The daunting task of implementing the country's tough €78 billion ($115 billion) EU/IMF bail-out agreement now falls to Pedro Passos Coelho, who is to become prime minister at the head of a two-party coalition led by his centre-right Social Democrats (PSD).

After six years in office and a failed effort to resist following Greece and Ireland into an international rescue, Mr Sócrates announced last night that he would resign as leader of the Socialists and withdraw, at least temporarily, from front-line politics. The party gained just 28% of the vote yesterday, its worst election result in more than 20 years.

The PSD's victory leaves the 27-nation EU with only five left-wing governments: Spain, Greece, Austria, Slovenia and Cyprus. Spain, by far the biggest of these, is expected to move into the centre-right camp in a general election due by next March.

Surpassing opinion-poll forecasts, the PSD won 39% of the vote, but fell just short of an overall majority. Mr Passos Coelho nevertheless achieved his main goal of securing enough seats to enjoy a comfortable majority in coalition with the smaller conservative Popular Party (CDS-PP), which gained 12% of the vote. The two parties together will hold at least 130 seats in the 230-seat parliament.

After two years of unstable minority government under Mr Sócrates—whose administration was brought down in March, less than 18 months into its term, in a vote over austerity measures—the election of a coalition with a solid majority is reassuring news for the EU and the IMF.

But Mr Passos Coelho, who has no experience in government, will have to work hard to meet the exacting deadlines set out for implementing the terms of the rescue package, a sweeping three-year programme of public-spending cuts, tax increases and economic reforms. Moreover, Portugal's constitutional rules mean his government is unlikely to take office until the end of June, less than a month before the first EU-IMF mission is due in Lisbon to assess progress.

Portuguese economists and business leaders are concerned that any delay in carrying out the EU-IMF programme would place Portugal in a similar situation to Greece, which is now seeking a second bail-out package worth €60 billion in order to avert a forced debt restructuring.

Portugal faces an extra challenge. The PSD, CDS-PP and the Socialists have all signed up to the bail-out programme. But the constitution, drawn up following the left-wing coup that toppled the dictatorship in 1974, could prove a hurdle. Unlike the bail-out packages for Greece and Ireland, the EU-IMF agreement with Portugal includes plans for extensive structural reforms in areas like justice, healthcare, education and even the armed forces. Mr Passos Coelho believes a constitutional revision is essential to ensure that legislation in these areas does not run foul of the constitutional court. Changing the constitution requires a two-thirds majority in parliament—which means support from the Socialists would be essential.

In a climate of deep recession, with unemployment at record levels and trade unions adamantly opposed to proposed changes in labour laws, the key to economic reform in Portugal and the success of the bail-out programme could still lie with the defeated Socialists.