Centre-Right Wins in Portugal: But Who Will Be Governing?

Politics - March 14, 2024

Let’s point out all the possible scenarios after the legislative elections.

Legislative elections were held on Sunday 10 March in Portugal, a very important country for the stability of southern Europe and with important repercussions also in terms of the upcoming European elections, in which Portugal will represent 21 MEPs which are a fairly large delegation.

The elections were held early due to the resignation of António Costa (PS, S&D), the outgoing Prime Minister who decided to take a step back after the accusations of corruption leveled against some members of his government. Despite the Prime Minister’s initial involvement as well, dragged into the mix due to his homonym with the Minister of Economy Antonio Costa Silva, the Prime Minister was later cleared of all accusations but still preferred to leave the field clear of misunderstandings.

In addition to having been the Prime Minister of his country, Costa also enjoys great international credibility: recently interviewed on the occasion of an electoral event, the former Italian Prime Minister Matteo Renzi (IV, RE) suggested Costa as a socialist name for the Presidency of the European Commission. Despite Renzi’s Party not achieving great electoral success, it is considered an authoritative voice in the reformist and liberal scene. This suggests that the European center-right will have difficulty in capturing the votes of some left-wing groups within Renew Europe (RE).

Returning to Portugal, we can analyze the political and economic scenario very quickly: the political chessboard is substantially dominated by two parties, the Socialists and the Social Democrats (PSD, EPP), parties that emerged after the Carnation Revolution and the dismissal of the dictator António Salazar who governed from 1932 to 1968, through the formula of the Estado Novo which held until 1974. Salazar’s dictatorship was characterized by a strongly Catholic and conservative set of values, a strong presence of the army especially in the management of the colonies (Angola and Mozambique above all), and an economic management halfway between the corporatism borrowed from Italian fascism and a liberalism comparable to what happened in Pinochet’s Chile. Results were soon announced: an increase in annual GDP of 5.7% between 1950 and 1970 and, an increase in industrial production, consumption, and capital formation. Naturally, political repression and the progressive fall of the colonies favored change with the arrival of the “carnations”.

PS and PSD have essentially shared control of the Country since 1976, alternating with a certain frequency. António Costa had been in office since 2015 when the socialists came second but secured the government by welcoming into a coalition the Bloco de Esquerda (BE, GUE/NGL) and the electoral cartel composed of the communists (PCP, GUE/NGL) and the greens (PEV, Greens/EFA). From there the successes were repeated and ever-increasing, reaching 41.38% in 2022 and the absolute majority of seats (120 out of 230).

The Portuguese economy is currently facing some challenges. Despite being in a relatively good situation for some years with preferential taxation and a cost of living that matched salaries, the country experienced a significant contraction in 2023. This was due to a combination of factors such as inflation affecting the entire European Union, the weakening of the German economy, which is one of Portugal’s major trading partners, and other issues. Another problem is the difficulty in European planning, as only 12% of the Recovery Fund funds intended for Portugal have been spent so far. This shows that finding effective solutions to the economic recession and contraction is proving to be complex.

The result of the legislative elections is easy to say: there is a substantial tie at the top, the PSD has federated with the popular CDS-PP (PPE) and the monarchists obtaining 29.7% and 79 seats; the PS is one percentage point behind with 77 seats; André Ventura Chega’s party (ID) came in third place with 18.1% and 48 seats; the political picture concludes with the “minor” formations such as IL (RE) with 8 seats, BE with 5, the communist-green coalition with 4, LIVRE (Greens/ALE) with 4 and PAN (Greens/ALE) with 1 seat.

Both main parties have lost consensus compared to the 2022 legislative elections: if the socialists lost 13 points, the social democrats fell by another percentage point while the great rise was that of Chega.

André Ventura comes from the PSD, from which he left in 2019, no longer following the party line: his program includes a reduction in taxation, a reduction in Parliament, a more severe judicial reform, and the end of subsidies for the unemployed. Criticized by many for his positions against immigrants, gypsies, and Muslims, Chega is nevertheless representing a strongly alternative voice and Ventura’s entry into the Portuguese parliament has brought the extreme right back into the Portuguese political debate after 45 years.

Chega’s results show exponential growth: 1.3% in 2019, 7.2% in 2022, and at these elections reached 18.1%, in a growth that is very reminiscent of that of Fratelli d’Italia (ECR) in Italy.

As seen, no political force has either the seats to govern alone or the possibility of forming a governing coalition. There are only two possible scenarios left to avoid new elections: on the one hand the possibility of a Grand Coalition, with the PSD and PS united to govern with 156 seats out of 230 but it would be difficult for such different souls to coexist and above all the risk would be that of further grow Chega who would intercept all the Right votes coming from the PSD; on the other, a coalition government in which the PSD would play the leading role accompanied by Chega in Parliament.

This second path, which would seem the most logical from an ideological point of view, is instead the most difficult one: even before the elections the leader of the PSD, Luis Montenegro, had declared on several occasions that he would never make agreements with Chega and even the liberals they said they were available for government coalitions as long as they did not include Ventura among them. In the speech following the defeat, Pedro Nuno Santos (leader of the socialists) stated that the PS would not vote against a government led by the PSD even if the center-right “should not count on the support of the PS to govern”.

Therefore, if the path of a single-party PSD government with external support from the PS is outlined to avoid Chega’s arrival in the Government, André Ventura has “returned fire” by claiming that he will vote against the Budget Law that will be written by the PSD if there are no items negotiated with Chega.

The outcomes of this situation are potentially critical: either Montenegro (or whatever figure is identified as Prime Minister) will manage to adopt a “two-oven policy”, satisfying the Socialists and Chega from time to time, or, likely, any political experiment launched is now destined to collapse in December when possibly neither the Socialists nor Chega will vote in favor of the Budget Law. The sociologist António Barreto underlined how new elections (which would be the fourth in five years) would be a disaster, both because Chega would rise further, definitively dismantling the two-party system, and because Portugal would become one of those unstable States, driving away funding and investors.

From a European Parliament perspective, with the data from these legislative elections, they would see 8 seats for the PSD, 7 for the PS, 4 for Chega, 1 for IL, and 1 for BE. With this framework, the EPP would recover one seat, S&D would lose two, the Greens would lose one while GUE/NGL would see three fewer, with an important entry for ID with Chega’s 4 MEPs. A profoundly transformed picture, to be kept under control.