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Tight race as Portugal votes amid first signs of economic recovery

Voters in Portugal are deciding on a new government, for the first time since the country left an EU bailout scheme. Despite years of austerity, pre-election surveys put the ruling conservatives slightly ahead.

The polls in Portugal opened on Sunday morning for a showdown between the current prime minister Pedro Passos Coelho and the main opposition challenger Antonio Costa, the charismatic former mayor of Lisbon.

According to an average of latest surveys, the ruling "Portugal Ahead" coalition is expected to win around 37.5 percent of votes, while the Socialist Party led by Costa can expect some 32.5 percent of the electorate.

The government has been gaining popularity during last few weeks, with Prime Minister Coelho campaigning on the fact that he steered the country out of recession.

"We have had very tough times in past four years, with a lot of sacrifices. I am confident on the work I have done," Coelho told reporters after voting in a Lisbon suburb.

"The right has recovered a part of the centre voter electorate and has succeeded in getting out its message that a return to power of the Socialists would lead the country to bankruptcy, like in 2011," political analyst Antonio Pinto told the AFP news agency.

Looking up

Portugal requested a 78-billion-euro ($88-billion) bailout at the height of the EU crisis, and only left the bailout scheme in May 2014. Years of harsh budget cuts now seem to have shown results: the economy has grown for 1.5 percent in the first half of this year comparing to the last, while the unemployment rate has fallen to around 12 percent, compared to 17.5 percent in early 2013.

At the same time, the socialist claim that the austerity program has hit the middle class too hard. During his campaign, the Socialist leaders Antonio Costa promised to lower personal taxes and reverse the public sector pay cuts.

"The Portuguese want a change of government and policies, and open a new cycle of hope," Costa said after casting his ballot.

However, the main opposition party has also promised to stick to EU budget rules.

Undecided voters

None of the major parties seems set to win the absolute majority in the Iberian country of ten million people, and the grand coalition between Prime Minister Coelho's Popular Party and Costa's socialists is unlikely.

A minority government, however, could open door to political instability and send a bad signal to the still fragile markets, analysts say.

As much as 15 percent of the voters are still undecided, and many pollsters also predict a high abstention rate. By noon (1100 GMT), less than 21 percent of people eligible to vote turned up at the polls, according to the government.

"I don't vote anymore for anyone. It is always the same parties, the same promises, and nothing changes," said Herminio Batista, a 72-year-old pensioner.

First results of the Sunday vote are expected around 08:00 pm local time (1900 GMT)

dj/xx (AFP, Reuters, AP)

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