section_path: Political career/Prime minister of Portugal/First term (1995–1999)
section_name: First term (1995–1999)
paragraph_text: First term (1995–1999)
  
  With a style markedly different from that of his predecessor, and based on dialogue and discussion with all sections of society, Guterres was a popular prime minister in his first years in office. Portugal was enjoying an economic expansion that allowed the Socialists to reduce budget deficits while increasing welfare spending and creating new conditional cash transfer programs. His government also accelerated the program of privatizations that Cavaco Silva 's government had begun: 29 companies were privatized between 1996 and 1999, with proceeds from privatizations in 1996–97 greater than those of the previous six years, and the public sector's share of GDP halved from 11% in 1994 to 5.5% five years later. Share ownership was also widened, with 800,000 people investing in Portugal Telecom upon its privatization in 1996 and 750,000 applying for shares in Electricidade de Portugal.
  
  In 1998, Guterres presided over Expo 98 in Lisbon, commemorating the 500th anniversary of the voyage of Vasco da Gama. Also in 1998, two nationwide referendums were held. The first one was held in June and asked voters whether abortion rules should be liberalized. The Socialist Party split over the issue of liberalization, and Guterres led the anti-abortion side, which eventually won the referendum. A second referendum was held in November, this time over the regionalization of the mainland. Both Guterres and his party supported such an administrative reform, but the voters rejected it.
  
  Contrary to his party's stance and following the removal of homosexuality from the list of mental illnesses by the World Health Organization in 1990, Guterres said, in 1995, that "he did not like homosexuality" and that it was "something that bothered him".
  
  On foreign policy, Guterres campaigned for United Nations intervention in East Timor in 1999, after it was virtually destroyed by Indonesian-backed militias when it voted for independence. He also finalized the 12-year negotiations on the transfer of sovereignty over Macau, which had been a Portuguese colony, to Chinese control in 1999.