* Support tumbles to 24 pct, Socialists at 31 pct
* Coalition partners say committed to bailout goals
* Tax hike plan stirred huge protests, broke political
* Government says open to "calibrating" measure
By Daniel Alvarenga and Axel Bugge
LISBON/PORTO, Sept 20 The popularity of
Portugal's ruling Social Democrats slumped to a record low on
Thursday, prompting business leaders to call for a rethink on
unpopular tax rises needed to meet the targets of an EU/IMF
The Social Democrats received 24 percent support, down from
36 percent in June and seven points behind the opposition
Socialists, in the Diario de Noticias daily's opinion poll.
The rightist CDS party, part of the Social Democrats' ruling
coalition, edged up to 7 percent from 6 percent.
The government plans to raise the social security levy in
2013 for all workers to 18 percent from 11 percent, potentially
creating tensions with the smaller party which is traditionally
opposed to higher taxes.
Following a late-night meeting on Thursday, the two parties
issued a statement saying they remained committed to the
coalition pact and the targets of the 78-billion euro ($101
They made no reference to the social security levy hike that
triggered huge protests on Saturday. But they underlined "the
importance of promoting social cohesion" and called the protests
"a message that has to be accepted with responsibility and
humility by all political and social players".
Portugal had managed to comply with the bailout conditions
with relatively little opposition but mass protests have erupted
since the Sept. 7 announcement of a new round of austerity.
Many analysts and politicians say the government may have to
come up with alternative solutions like more spending cuts. The
opinion poll delivered gains to small leftist parties which
oppose the austerity measures.
While the Socialists slipped to 31 percent from 33, the
Communists' support rose to 13 percent from 9 in the last poll
and the Left Bloc rose to 11 percent from 9.
Speaking at a conference in Porto, Fernando Ulrich, chief
executive of the country's third-largest private bank BPI
,sa id the government-proposed levy hike was rational
from an economic point of view, but would be worthless if it
undermined social cohesion.
"It is obvious that it provoked a very strong social
reaction and that's more important than the technical merits.
The most important point for Portugal has been its social
cohesion ... It is more important than the economic rationale."
Luis Reis, board member of retailer Sonae,
Portugal's largest private sector employer, said he hoped the
government would revise what he said was an "experimental
measure", though he acknowledged additional austerity elements
would be needed to reach the country's budget goals.
"We think that the global impact of the measures as they
were announced by the government were not well-evaluated ...and
it is certain that companies linked to domestic demand will be
"We believe that the recent statement of readiness by the
government to revise the levy can bear fruit," Reis said.
Portugal's economic crisis has been relatively contained but
austerity measures have pushed the nation into its worst
recession since the 1970s.
The government has said it is willing to "calibrate" the tax
rise but said alternative austerity moves would also hurt
consumption. Talks with employers and unions on
the new austerity measures continue next week.
Nearly half of those surveyed in the poll, 48 percent, said
they thought there was a high probability that Portugal would
"live through a situation identical to Greece" in the next one
to two years. That was up from 34 percent who thought that
scenario was likely in the previous poll.
Greece's debt crisis has sent the country into recession for
five years and sparked mass protests. Portugal has been in
recession for two years but strikes and protests have been
infrequent, although unemployment is at record high levels.
However, hundreds of thousands of Portuguese took to the
streets to demonstrate against the tax hikes on Saturday in the
biggest public protest since the country received its bailout
The poll was conducted by pollsters at Lisbon's Catholic
University on Sept. 15-17. It surveyed 1,132 people and had a
margin of error of 2.9 percentage points.