Trotskyites are not known for their levity, but in Lisbon last week a poster promoting the Partido Socialista Revolucionario, which scraped together just over 1% of the votes in Portugal's last elections, read: VOTE PSR FOR AN ABSOLUTE MINORITY.

That splash of humor was an anomaly as Portugal's two main parties went head-to-head after a much tougher goal: an absolute majority in the country's Oct. 1 elections. Most polls predict that the 10-year rule of the Social Democrats under Anibal Cavaco Silva is about to end and that the Socialists, led by Antonio Guterres, will govern, but without a majority. If that is the outcome, it will reflect the country's belief that the Social Democrats are worn out after a decade in office.

Cavaco Silva announced in January that he was stepping down as the Social Democrats' leader. He remains Prime Minister until the elections, but has kept a low profile in this campaign. Last week he told Time that he was optimistic about the chances of the man who has succeeded him as party leader, his deputy and Defense Minister, Fernando Nogueira, 45. Whoever wins, Cavaco Silva stressed that Portugal is a stable democracy and that this has been a "very civilized" campaign. He said he would decide soon after the election whether or not to stand for Portugal's presidency when Mario Soares' term ends next year.

Nogueira's rival Guterres is equally confident that his Socialists, with promises of more spending on education and social security reform, can translate their modest lead in the polls into an election win. But he may fall short of controlling the 230-seat Assembly of the Republic. And for both the Social Democrats and Socialists, coalition building presents problems. The right-wing Popular Party and the Communist Party, each of which looks set to lift its share of the vote to about 10%, reject the two main players as policy twins. A Popular Party sticker pictures them as identical saucepans, the Social Democrat one burnt around its base.

Guterres insists the apparent similarity mainly reflects that both main parties are pro-Europe and committed to meeting the Maastricht Treaty's strict fiscal and monetary criteria for entering the European Monetary Union in 1999. The communists and the Popular Party, on the other hand, would like to use what muscle they have to get Portugal to pull out of Maastricht, which they contend asks too much of a redeveloping country. Guterres, a 46-year-old electrical engineer, concedes that the treaty "does leave both main parties tight margin for maneuver." However, like his opponent Nogueira, he believes Portugal has no choice but to meet the treaty requirements, such as steadily reducing budget deficits and public debt, if it is to avoid becoming a European backwater.

While Cavaco Silva could cite the construction of 1,600 km of new roads during his successive governments and while Guterres countered last week that he would spend more on education, Portugal's wealth, plus $23 billion between 1994 and 1999 in European Union support, doesn't appear to be trickling down very far. Communist leader Carlos Carvalhas says about a third of the country's nearly 10 million people are living below the poverty line.

Nowhere is the need for help more apparent than in the barracas, or shanty-towns, that ring Lisbon and Oporto, where people have had to steal signs from the country's new highways to use as building material for their hovels. Vasco Franco, the Socialist deputy mayor of Lisbon, claims the city will get rid of these barracas by the year 2001. But that target means building houses for 20,000 families.

Although the incumbent Social Democrats can point to a 7.5% unemployment rate that is well below the E.U. average of 10.7%, opponents insist that the comparison is misleading. "Portugal's figure is unreal," says the Communist Party's Carvalhas, "because it includes as employed a very high number of seasonal workers and people who might work only two hours a week. It leaves out those so discouraged they have just given up."

Peter Mollet, of the Lisbon office of the consulting firm of Price Waterhouse, says business wants a stable majority government and doesn't much care whether it is Socialist or Social Democrat. He argues that for all its problems, Portugal has come a long way in only two decades since dictatorship. "Recently I advertised for 10 young management consultants," he recalls. "I got 1,300 replies, and I'd say 1,000 were of a very high standard, people with good degrees, two languages after Portuguese, computer skills, willing to work hard."

Ten lucky people now have jobs, but whichever party wins on Oct. 1, its biggest challenge will be to try to ensure that those who are less fortunate remain, like the Revolutionary Socialist Party, in an absolute minority.