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Pedro Passos Coelho votes in an election his party is expected to win. Paulo Duarte/AP/Press Association Images

Portugal heads to the polls to elect new government as bailout looms large

The ruling party is unlikely to suffer a Fianna Fáil type electoral meltdown but the bailout means that it will almost certainly not be re-elected.

PORTUGUESE VOTERS ARE today electing a new government to steer them through expected years of recession and grinding austerity measures being adopted in return for a €78 billion international bailout.

Portugal is one of the eurozone countries with an economy wrecked by debt, compelling it to call for a rescue loan two months ago.

Just as Fianna Fail was unseated in Ireland following its decision to seek an international bailout last year, polls indicate Portugal’s main opposition Social Democratic Party will unseat the ruling Socialists on Sunday.

However, the kind of rout suffered by Fianna Fáil is not expected to be replicated by the Socialists.

CNN reports that Pedro Passos Coelho, the leader of the Social Democratic Party, is only slightly ahead of Jose Socrates in the latest polls.

Socrates resigned in March after opposition parties overwhelmingly defeated his last-ditch austerity budget that was aimed at preventing one of the eurzone’s weakest economies plunging into chaos.

Socrates’ caretaker government then agreed the €78 billion EU/IMF bailout in May.

The next government will inherit a record jobless rate of 12.6 percent and a forecast economic contraction of 4 per cent over the next two years in what is already one of western Europe’s poorest countries.

- additional reporting from AP

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