Portugal is voting in snap elections Sunday to designate a new government which is to implement a tough EUR 78 B bailout.

Opinion polls give a lead to the opposition, center-right Social Democrats (PSD) against the ruling Socialists, but the margin will not be enough to form a clean-cut majority, and experts predict PSD will have to seek a coalition partner.

According to these polls, the center-right Social Democrats will win nearly 37% of the vote, compared to about 31% for the Socialists.

All the main parties endorsed the bailout, which includes tough austerity measures amidst crumbling economy – there is 12% unemployment in the country and the economy is expected to shrink by 2% in 2011.

The clauses of the bailout require tax hikes, a freeze on state pensions and salaries and cuts in unemployment benefits.

The leader of the Socialist, Jose Socrates, resigned as Prime Minister in March, prompting early elections after the opposition in parliament rejected his minority government's fourth austerity package in less than a year. Since then, he has acted as caretaker prime minister.

"We are going to cut state waste and excesses while finding a way for the needy to get what they need," Social-Democrat leader, Pedro Passos Coelho, said, cited by BBC.

Socrates accuses the Social Democrats of pursuing a "radical right-wing agenda" and criticizes Passos Coelho for lacking experience in government.

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