epa06436883 Social Democratic Party (PSD) candidate, Rui Rio, makes his victory speech after winning the direct elections for the leadership of the party, Porto, Portugal, 13 January 2018. More than 70,000 PSD militants voted to choose the next social-democratic president and successor of Pedro Passos Coelho in the direct elections between Pedro Santana Lopes and Rui Rio. EPA/FERNANDO VELUDO
Rui Rio, the former mayor of Porto, won 54 per cent of the votes © EPA

Portugal’s centre-right opposition Social Democrats have elected Rui Rio as leader, in a vote that will redraw the country’s political battle lines in the run-up to next year’s general election.

The choice of Mr Rio could see PSD attempt to woo prime minister António Costa’s Socialist party (PS) away from its “anti-austerity” alliance with the far left if the PS is re-elected in 2019 without an overall majority.

Mr Rio defeated Pedro Santana Lopes, a former prime minister, winning 54 per cent of the votes. The former mayor of Porto will succeed Pedro Passos Coelho, who as prime minister from 2011 to 2015 steered Portugal through a punishing international bailout. The PSD is the largest party in parliament.

In the most divisive issue of the leadership contest, Mr Rio said he would support a minority PS government if the centre-left party won the next general election but failed to secure a working majority — a distinct possibility on the basis of current polls.

“I would have no hesitation in supporting the PS [in these circumstances] if it meant preventing the country from being yoked to the extreme left,” Mr Rio said during the leadership campaign.

Mr Santana Lopes denounced this as an admission of defeat so far ahead of the general election.

The PS has a 14-point lead over the PSD in opinion polls and Mr Costa may see little attraction in abandoning his successful leftwing alliance for a centrist pact if he fails to win an absolute majority in 2019.

Mr Passos Coelho led a centre-right alliance to victory in the previous legislative election in 2015, but fell short of regaining his overall majority. Mr Costa overturned decades of political precedent by refusing to support a minority government formed by the party with the most seats. Instead he forged a pact with three smaller leftwing parties to support a minority PS government under the banner of “turning the page on austerity”.

Despite dire warnings from the PSD that Mr Costa would lead Portugal towards a second financial crisis, his government has marked up a string of economic successes while the PSD has seen its support drop in opinion polls.

Polling published last week showed that even among respondents who habitually vote for the PSD, a clear majority would prefer Mr Costa as prime minister over either of the candidates for the party leadership.

The PS government initially clashed with the European Commission over fiscal policy. On Saturday, however, Mário Centeno, finance minister, joined the top echelon of EU economic policymakers when he began his mandate as president of the eurogroup of eurozone finance ministers.

Mr Passos Coelho, who decided to step down as party leader after the PSD suffered heavy losses in nationwide local elections in October, won the 2015 general election despite having led the country through a punishing bailout by the EU and International Monetary Fund.

Having pledged to “go beyond” the tough fiscal measures required by international creditors and overseeing a wave of state sell-offs, he has been criticised by opponents within the PSD for forsaking the party’s social democratic roots for more liberal economic policies.

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