The Socialists won 120 of the 230 seats in parliament in a general election on Sunday, the first time any party has held an outright majority for a decade, and their victory was endorsed by a large voter turnout.
Socrates, who ousted centre-right Prime Minister Pedro Santana Lopes, said he wanted Portugal's fourth government in three years to restore confidence to the country, where unemployment hit a seven-year high of 7.1% last year.
"The Socialist Party has a majority to govern Portugal. This is not a majority of protest. It is a way to build a new future for Portugal," Socrates, 47, told cheering supporters after the Iberian nation's clear-cut swing to the left.
Cars with Socialist supporters waving flags raced up and down Lisbon's palm tree lined Liberty Avenue to celebrate the party's largest election win since a revolution overthrew a rightist authoritarian government in 1974 and established democracy.
Socialist leader Socrates says the
win is a way to build a new future
Socrates faces challenges in boosting an economy still struggling after a recession and closing a stubborn budget deficit that breached euro currency zone limits in 2001, but many analysts saw his strong mandate as cause for optimism.
Good for markets
"The result will be good for the markets," said fund manager Pedro Correia da Silva.
"I was scared that the election results would be neither fish nor fowl. But the government that comes out of these elections now has all the conditions to do its work, if it has good policies and good politicians."
"But the government that comes out of these elections now has all the conditions to do its work, if it has good policies and good politicians"
Pedro Correia da Silva,
President Jorge Sampaio dissolved parliament early in December, citing lack of confidence in Lopes' coalition government after a bout of instability.
Lopes was in power for only seven months. The former Lisbon mayor replaced Jose Manuel Barroso as prime minister in July when the latter left to become European Commission president.
Portugal's Lusa news agency, quoting preliminary results from the National Elections Commission, said the Social Democrats had picked up 72 seats in the election.
Below average growth
The Communists won 14 seats, the rightist Popular Party - the Social Democrats' coalition partner - had 12, and the Left Bloc had eight seats. The results do not include four deputies to be elected by Portuguese living abroad.
President Sampaio will meet party leaders in the next few days to discuss the formation of a new government and Socrates is likely to take office in mid-March.
Prime Minister Lopes was in
power for only seven months
Socrates has vowed to boost economic growth to 3% a year through technological investment.
The central bank has forecast growth this year at 1.6%, below the European Union average for the fifth year in a row.
He has also said he will cut public spending, now nearing half of gross domestic product, by reducing the public work force through attrition.