Portugal's main opposition party re-elects moderate leader as election looms

By Sergio Goncalves

LISBON (Reuters) - Portugal's main opposition Social Democratic Party (PSD) re-elected Rui Rio as its leader, tasking the moderate politician with the challenge of overcoming the ruling Socialists' lead in opinion polls ahead of a Jan. 30 snap election.

Rio, a 64-year-old trained economist who has led the center-right PSD since January 2018, beat European Parliament member Paulo Rangel in Saturday's leadership contest by a margin of 52% to 48%.

Contrary to his popularity as mayor of the country's second-largest city of Porto from 2001 to 2013, Rio has had a troubled tenure as an opposition leader, with critics saying he has been timid at best in challenging Socialist Prime Minister Antonio Costa.

"I see this victory with satisfaction, with pride, but above all with a sense of responsibility. Now we have a great challenge ahead, which is to win the election to change the country's governance," Rio said in his victory speech.

"I will win," he said.

Portugal's election was triggered by the rejection of the government budget's bill in the parliament last month, an action that effectively ended the relative political stability the country has enjoyed in the last six years.

The Socialists lead the polls with support of between 38.5% and 39%, far above the PSD'S 24.6%-28.1%, but short of what would be needed to win a parliamentary majority.

Analysts say the political impasse could linger after the election as no party or viable alliance is likely to achieve a stable majority.

Rio, criticized by some for backing the government during the COVID-19 pandemic, contends that moderate voters "at the center of the political spectrum" will determine the winner of the election.

He has argued the PSD should allow the Socialists to govern for "at least two years" if the latter win the vote but fall short of a majority, so that Portugal can carry out reforms and make the most of a windfall of European Union pandemic recovery grants.

Rio hopes the Socialists will have the same conciliatory attitude if his party wins.

The PSD leader wants to spur growth and end the "tax choke" for small and medium-sized businesses and families, aiming to create wealth that will spur better wages.

(Reporting by Sergio Goncalves; Editing by Paul Simao)