The rejection of the budgets leads Portugal to early elections

The acclaimed left-wing agreement that has allowed the Socialist Party (PS) to rule in Portugal since 2015 has arrived definitely at an end. The budgets presented by the Government have not convinced the Portuguese Communist Party (PCP) or the Bloco de Esquerda (BE), who have voted against it, causing a political crisis and an electoral advance in the country. Of the 230 seats in Parliament, only 108 Socialist deputies have voted in favor, compared to 117 deputies who have voted against. The remaining five have abstained. Now it is in the hands of the President of the Republic, Marcelo Rebelo de Sousa, dissolve parliament and set a date for the elections. A decision that you will make in the coming weeks.

The president has already initiated contacts with the prime minister, António Costa, and with the president of the legislative chamber, Ferro Rodrigues, to assess the situation, and at the beginning of next week he will study with the parties the best moment to call the elections. Until then, both the Government and Parliament will function with full capacities, since Costa has ruled out resigning. Once the decree of dissolution of Parliament is approved, a period of 60 days will be launched for the electoral call.

Debate on

The Socialists and their former partners have continued with the exchange of reproaches of the last days in the last day of budget debate. Both Prime Minister Costa and the Finance and Economy ministers have defended the socialist management since the party came to power in 2015, when the country was going through a serious economic crisis with a skyrocketing deficit and rising public debt.

Costa has criticized the BE and the PCP for not making viable what the socialists consider the budgets more to the left since they came to power – with measures such as the increase of 40 euros in the minimum wage, to the 705 euros, or the investment of 700 million euros in the National Health Service (SNS) -, but the former partners have demanded a greater effort from the Executive, especially in terms of pensions, salaries and health.

The refusal of the left-wing parties to approve the accounts compromises the government’s spending capacity for next year, which will be limited by law. The Executive has warned that this limitation puts at risk the execution of the funds of the Recovery and Resilience Plan (PRR), although experts point out that there are still mechanisms to accommodate the money from Europe by way of an urgent alteration of budgets for 2021.

Early elections

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The will of the majority of the parties is to dissolve the chamber as soon as possible, but the internal processes in the two main right-wing formations, the Social Democratic Party (PSD) and the Democratic and Social Center (CDS), which will elect their leaders In the next few months, they will probably force Rebelo de Sousa to delay the call. These struggles can hurt both parties in the next elections, as the elected leaders will have little time to prepare the campaign and set up the electoral lists. The CDS, which won 24 seats in 2011 and was a key player in Pedro Passos Coelho’s government (2011-2015), is in free fall and at risk of disappearing if it does not opt ​​for a coalition with the PSD.

In the case of the left, the situation is not much more encouraging. The PS suffered the wear and tear of six years of government in the last municipal elections, in which despite the victory, it lost important cities such as Coimbra or Lisbon. The polls also do not favor the PCP and the BE, which could suffer the consequences of not supporting the socialist accounts. The only party that really benefited from an electoral advance is Chega, the formation of the extreme right, which some polls place as the third political force in the next elections.