LISBON - Portugal's ruling Socialists (PS) won Sunday's parliamentary election but fell short of an outright majority, meaning Prime Minister Antonio Costa will need to negotiate a new deal with one or both of his far-left allies in the previous legislature.
"It's clear from this election that the PS is reinforced and the allied parties consolidated their positions," Costa told supporters chanting "Victory! Victory."
"The Portuguese liked our arrangement. It would be desirable to renew it, but it does not depend on us. Our firm will is to negotiate," he said.
"We will see if it's possible. It is essential for the country's international credibility, to give confidence to investors," Costa said, adding that he also meant to negotiate with the upstart People-Animals-Nature party (PAN) party.
Negotiations are not expected to be as messy or as long as in neighbouring Spain, which still has no government more than five months after elections and is heading for a repeat vote in November.
Costa has benefited from an economy that is growing more than the EU average, helped by increased exports and a booming tourism industry that last year saw visitors outnumber Portugal's inhabitants.
Leaders of the Left Bloc and the Communists, which have backed Costa since the last election in 2015, both said they had no objections to him being nominated as premier and were open to negotiate if the Socialists committed to improving the lives of workers.
"There is no obstacle for the president to appoint the prime minister and for the government to be formed and start working," said Communist leader Jeronimo de Souza. "We will determine our position depending on the PS' choices, on its budget instruments and the content of its legislative proposals."
With most of the votes counted, the Socialists led with 106 seats. This meant they were first but, with only four seats still not accounted for, they cannot reach the full majority of 116 seats in the 230-seat assembly.
The main opposition Social Democrats (PSD) won 28% of the votes and at least 77 seats, according to preliminary results.
'We Got Stronger'
At the PS election rally, supporters stood up cheering as the exit polls were published.
While the total number of seats wasn't yet known, it would in any case give them more seats than in the last election, in 2015, when they won 86.
"We got stronger from this election and we will be able to continue with our policies," said 25-year-old supporter Miguel Matos.
In 2015, it took less than two months for Costa, whose party had come in second behind the PSD, to strike an unexpected alliance with two far-left, Eurosceptic parties and be sworn in as prime minister.
PAN attracted more votes than in the previous election, riding a wave of popularity among pro-environment parties in much of Europe to land at least four seats.
"It's a very good result. I still wish it was more, because the country needs to move quickly to tackle the climate emergency," PAN supporter Paulo Santos, 43, said at the party's evening rally.
The election already claimed its first political victim.
Assuncao Cristas, the leader of the rightist CDS-PP party, who announced her resignation after its record low result.