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Post-Election Intel Series: Portugal
Our partner at FIPRA Portugal, Ana Vila Nova, shares her post-election analysis and insights for those hoping to broaden their presence and knowledge in the region.
Election Overview:
The Aliança Democrática (center right) won the March 10th elections by a very narrow margin. The Government will be appointed in April. The AD will try to avoid alliances with the far right Chega. The voting of the 2025 State budget law in October will be a critical test. Although the AD is more for less State and better State, major changes in sectoral legislations will be the outcome of cumbersome negotiations between the AD Government, on one side, and the Socialists and the far right on the other side.
The Aliança Democrática, AD (center right) won the March 10th elections: 29,49% of the votes, 79 Parliament seats (out of 230).
Election Results:
- The Socialist Party, PS had 28,66% of the votes, 77 Parliament seats. The PS has been in power since 2015, with an absolute majority since 2022.
- The Chega (far right) had 18,06% of the votes, 48 seats (12 seats in 2022).
- The Iniciativa Liberal, IL (right wing) had 5,08% of the votes, 8 seats.
- The new Parliament sessions will start in early April.
- The President of the Republic will appoint Mr Luís Montenegro, leader of the AD, as Prime Minister by early-mid April.
- While there is now a right-wing Parliament majority, governing Portugal will not be easy. The AD winning coalition so far refused an entente with the Chega. Thus, governing will require ad hoc negotiations with each political party in the opposition. Despite Mr. Montenegro had repeatedly stated during his campaign that any alliances with the Chega were out of the question, according to our sources the AD might reach a parliamentary agreement with the Chega, aiming at the approval of pieces of legislation, including the 2025 State Budget Law. It should be noted that the PS has already stated that it will not vote in favour of the 2025 State Budget Law which is due to be proposed by the Government and subsequently voted by the Parliament in October 2024 (though it might abstain).
Divisions within the AD between people pro and against alliances with the Chega are expected. Political instability is unavoidable. Further, political groups' major drive will be to please voters rather than dealing with economic growth and structural reforms. In any case, the far right Chega's disruptive objective will be the major problem in Portuguese politics ahead. In conclusion, the possibility of early elections is very likely. At this stage more info is required before anticipating more accurate scenarios for the foreseeable future.
Sectoral Implications & Updated Government Priorities:
- The energy sector priorities are the following: lithium (Portugal has the largest reserves in Europe), renewable and green energies for agriculture, green hydrogen, and Nuclear.
- In the health sector, there will be an expansion of the private sector, namely through public private partnerships.
Our recommendation is that both new and existing businesses should wait for the appointment of the PM and respective Ministers and Secretaries of State, as well as the approval of the government programme. Depending on the company size, area of business, objectives and specificities, in case network clients request a tailored strategic political analysis and recommended approach, we will be glad to help, as always.
For more information, contact Ana Vila Nova at [email protected] or the FIPRA Network Team at [email protected].
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