Portugal’s parliament toppled Prime Minister Luis Montenegro’s center-right minority government in a confidence vote Tuesday, likely leading the country to its third early election in just over three years.
The premier requested the confidence vote last week, saying he wanted to clarify whether his government had “all the conditions” to carry out its program after struggling to put an end to speculation about potential conflicts of interest related to a company owned by his family.
The Socialists and far-right party Chega, the two biggest opposition groups, voted against the government. Combined, the two political forces have more than half of all lawmakers in the chamber.
The government’s ouster may delay key decisions, including a plan to privatize state-owned airline TAP SA this year and investments in infrastructure such as high-speed railway links. Montenegro’s administration, which took office less than a year ago, also aimed to increase defense spending.
The snap election could take place on May 11 or May 18 at the earliest, President Marcelo Rebelo de Sousa said last week. While the president is mainly a figurehead, he has the authority to appoint the premier, dissolve parliament and decide whether to call early elections. The president will hold meetings with parties on Wednesday, a necessary step before he can formally schedule an election.
“We tried at all costs, until the last minute, to avoid early elections,” Montenegro said after the confidence vote was rejected, referring to attempts to negotiate with the Socialists. “The country is in a weaker position and I deeply regret that this is the case.”
The Socialists, led by Pedro Nuno Santos, had previously let Montenegro’s 2025 budget pass by abstaining in a vote in November. The prime minister had to compromise on key policies such as corporate tax cuts to get their backing.
Both the Socialist leader and Montenegro say they’re in favor of political stability, and want to avoid being blamed for causing an early election.
Hours before Tuesday’s vote in parliament, Montenegro said he was willing to withdraw the confidence motion if the Socialists would agree to limit the duration of a planned inquiry related to his family-owned company. Opposition leader Santos rejected the proposal and called on the premier to withdraw the motion.
“What took place in parliament today was a disgrace,” Santos said. “There were maneuvers, there were games, there were tricks, this is unacceptable. I really regret that happened.”
Montenegro, 52, has led the PSD party since 2022 and says he will seek reelection as premier. It will likely be a close race against Socialist leader Santos.
A poll published by TVI on Sunday showed the ruling AD coalition leading with 34% support, followed by the opposition Socialists with 29% and Chega with 14%. Another opinion poll published by Jornal de Negocios on Tuesday showed the Socialists leading the ruling coalition by 1.5 percentage point.
Portugal’s last early election was held in March 2024 and Montenegro took office in April. The premier’s AD coalition got a narrow win over the Socialists in that election. Far-right party Chega grabbed much of the spotlight in that vote, when it quadrupled its number of seats in parliament.
Chega leader Andre Ventura has appealed to a growing number of disgruntled voters by blaming successive center-left and center-right governments for what its leader says is systemic corruption in Portugal. Ventura, a former tax inspector, has also focused on issues such as immigration.
Prime Minister Montenegro succeeded Antonio Costa, a Socialist who unexpectedly quit as prime minister in November 2023 after eight years in office amid a probe into alleged influence peddling. Costa, who denied wrongdoing, is now European Council president.
Montenegro has been facing questions since February about a family-owned firm and potential conflicts of interest. The premier said on Feb. 21 that he set up the family-owned company, called Spinumviva, when he wasn’t active in politics and that it’s absurd to consider that owning a stake in the firm generates a conflict of interest. He’s said he never took any decision that involved a conflict of interest, and the firm is now totally owned by Montenegro’s children, he announced earlier in March.
Minority governments in Portugal have tended to be short-lived: In 50 years of democracy, only two have survived a full four-year term. The Socialists and Montenegro’s center-right PSD party, which is the senior partner in the governing AD coalition, have dominated Portuguese politics over those five decades.
Fiscal discipline has been a focus for successive Portuguese administrations since the euro-area debt crisis, when the country needed a bailout. While in 2023 the debt ratio dropped below 100% of gross domestic product for the first time since 2009, it’s still at a high level and the memory of the debt crisis and Portugal’s bailout is relatively fresh. S&P Global Ratings on Feb. 28 upgraded Portugal’s government bond rating to A from A-, citing deleveraging.
The government aims to post a budget surplus of 0.3% of GDP this year as economic growth accelerates. The Bank of Portugal in December raised its 2025 growth forecast to 2.2%.
Source: Bloomberg