Portugal will elect a new government Oct. 4, with voters choosing whether to stick with austerity policies or get more money in their pockets.

Portuguese President Anibal Cavaco Silva announced the date of the parliamentary elections in a televised address late Wednesday. He said it was "extremely desirable" for the next government to have a clear majority in Parliament, ensuring political stability.

But recent opinion polls have indicated that main rivals are neck-and-neck.

The two parties in the center-right coalition government say Portugal must persevere with spending cuts adopted after the country's 78 billion euros ($85.7 billion) bailout in 2011.

The center-left Socialist Party, the main opposition, says it would abide by eurozone fiscal rules but ease income taxes and encourage corporate investment.