PS defuses political crisis in Portugal by allowing Luís Montenegro to approve budget International

Portugal will have new budgets in 2025, closing the door on political uncertainty that could lead to elections, the third in three years. The Socialist Party (PS), the main opposition force in the centre-right coalition led by Luis Montenegro and which lacks a majority in parliament, will abstain from the vote to allow the project presented by the government to proceed.

“If the budget is not approved, it could lead to the third legislative elections in less than three years, which would be unlikely to result in a stable majority,” Pedro Nuno Santos, the Socialist leader, said late Thursday. , at his party headquarters. Thus, he justified his position. However, Nunes also warned that nothing links him to Montenegro’s executive. “This is an isolated government, more of a minority than ever before and completely dependent on the largest opposition party, the PS. We have no commitment with them, but we have a commitment with the Portuguese,” he wrote on the social network X (formerly Twitter).

Although the proposal will be debated and voted on at the next meeting of the PS’s National Political Commission, convened next Monday, the boycott defended by its leader made clear the great unknown experienced in Portuguese politics in recent months. Has gone. It would be an unexpected turn if the Political Commission rejected its leader’s proposal in view of the existence of a clause that would have given the government a free hand for the next year.

internal debate

Within the socialist family itself there were differences of opinion about what line to follow: the most centrist wing was in favor of allowing the government to approve the budget, while the most leftist wing, to which Santos has traditionally been placed, Were inclined to vote against it. ,

In recent days, pressure has intensified on the PS to avoid a new political crisis in the country, which lost elections in March by a narrow margin compared to the Democratic Alliance coalition. Although the government could operate with an expanded budget into 2025, there was a risk that the President of the Republic, Marcelo Rebelo de Sousa, would dissolve Parliament and call early elections. The precedent was set by the head of state himself in 2021, when he abolished the legislature after the opposition overturned the budget of socialist Antonio Costa’s government.

The Prime Minister of Montenegro celebrated the news from Brussels and praised the centre-left’s “sense of responsibility”. The government was unable to reach a parliamentary agreement with any strength to guarantee a majority to support the budget in the plenary session at the end of October, despite the fact that it negotiated from left to right.

Montenegro’s fight against the extreme right

Publicly the government’s main move has always been to negotiate with the socialists, although privately it also held several meetings with far-right leader Andre Ventura, about which the country was not informed until Ventura held several Did not disclose this in interviews. Montenegro refused to confirm whether he had met on five occasions – four secret and one public – with the leader of Chega (Ventura’s populist formation), although he denied that he had asked him to join a future government. Offered to join, as requested by his party. Opposition.

Chega has changed his opinion several times regarding the budget vote, but his 50 deputies—the third most important group in the Assembly of the Republic—will vote against it. “This is a profound betrayal of the right and its voters,” criticized Ventura, who criticizes the increase in indirect taxes to compensate for the reduction in direct taxes. “It follows the same logic as the PS budget,” he criticized.

The budget project considers some measures sought by socialists in fiscal matters, such as a reform of the personal income tax for people under 35 (IRS Jovem) that deepens progressivism. The initial design of the government consolidated an alternative regime with practically no progressivism, drawing criticism from the International Monetary Fund (IMF). In addition, the corporate tax (IRC, as it is known in Portugal) will be reduced from 21% to 20%.

With the guarantee that the budget will be passed in Parliament, the government buys time and is guaranteed a minimum of two years of legislature. Even if it does not receive support for the 2026 approval, the Chamber can no longer be dissolved by the President of the Republic, who has that prerogative but is prevented from using it in the last six months of his mandate. Rebelo de Sousa will be in that position in the second half of 2025.