Portugal’s Far Right Party Looks to Capitalize on Protest Vote
- Oops!Something went wrong.Please try again later.
(Bloomberg) -- Portugal will hold an election this weekend after the sudden resignation of Prime Minister Antonio Costa, giving voters a chance to either stick with the Socialists or opt for change and join the shift to the right seen across Europe.
Most Read from Bloomberg
Billions Pour Into Nigeria as Tinubu’s Reforms Start to Pay Off
Slow US Inflation Retreat Is Set to Bolster Fed Patience on Rate Cuts
Costa stepped down in November after the country was rocked by news of police raids on government buildings and a probe into alleged influence peddling.
Even if the Socialists, under new leader Pedro Nuno Santos, retain power, they’re likely to be in a weaker position without an absolute majority. Their main challenger is the right-of-center AD coalition, made up of the PSD and smaller CDS-PP.
With the risk of a hung parliament, there’s much focus on the far-right party Chega, which has had a rapid rise and wants to be the kingmaker after the election. The center-right leader has ruled out any agreement with the party.
What do opinion polls say?
Right now, it looks like a very tight race. One poll on Sunday had the Socialists ahead by a few percentage points, while others have the AD alliance with the edge. A poll last night, one of the last before voting, put the AD on 34%, leading by 6 percentage points.
But crucially, neither seems to have enough support on their own to get an absolute majority. That means Portugal could end up with a minority government reliant on the support of smaller parties, who in turn may seek big concessions in return for backing key measures such as the budget.
How strong is Chega?
The election won’t just be about the two main centrist parties. When Costa was reelected in 2022, Chega, which translates as “Enough,” grew to 12 seats in parliament from one, becoming the third biggest force. Support has since increased to about 17% from 7%, but it’s unlikely to break into a top-two position.
Like other far-right parties in Europe, Chega’s rapid rise has been helped by its combative founder and leader, Andre Ventura. The 41-year-old former tax inspector and television football commentator has appealed to disgruntled voters with a populist message that focuses on issues such as immigration. He also blames successive governments for what he says is systemic corruption in Portugal.
The PSD and the Socialists have been dominant in politics since 1974, when a four-decade dictatorship ended.
What’s the state of the economy and government debt?
Growth is forecast to slow to about 1.2% this year after a post-pandemic rebound, though the economy is performing better than the euro area.
The economy has enjoyed a boost from record tourism revenue, but it’s struggled to boost wages and living standards. Opposition parties have tapped into that: The PSD has pointed out that the country has been overtaken in gross domestic product per capita by eastern European nations that joined the European Union later, including the Czech Republic and Slovenia.
On the fiscal side, Portugal’s debt ratio dropped below 100% last year for the first time since 2009.
But a change in government may not lead to a major shift in budget policy, given the ratio is still high and the memory of the debt crisis and Portugal’s bailout is relatively fresh. S&P Global Ratings raised Portugal’s credit rating this month and said it expects fiscal discipline to continue after the election.
What are parties offering?
Besides low wages, voters are concerned about the lack of affordable housing, high taxes, pensions and the emigration of qualified young people.
The Socialist program includes lower income taxes for the middle class and young people, and increasing the minimum wage. But they also aim to keep cutting the debt ratio, albeit at a slower pace than in recent years.
The Socialists also want a more focused economic policy to ensure a better chance of developing transformational industries and boosting productivity. “The state has to make choices about what sectors and technologies to support,” the program says.
The AD alliance wants to gradually reduce the corporate tax rate to 15% from 21%. It also plans to lower income taxes as well as taxes on house purchases for young people.
Like the Socialists, it forecasts that debt will decline under its plans, which include savings in spending. It also says the Socialist Party has an “ideological fixation” on state ownership, indicating it may push for less public involvement in some sectors.
Chega wants harsher punishment for individuals convicted of corruption and proposes using money recovered from corruption to lower taxes and increase pensions. Its electoral program supports life imprisonment for the most serious crimes and more restrictions on immigration.
Who are the main contenders for prime minister?
The Socialists’ new leader, 46-year-old Santos, is an economist and former minister, often linked to the left-most wing of the party.
He resigned as infrastructure and housing minister at the end of 2022 following criticism about compensation paid to a board member at state airline TAP, which received more than €2 billion of government aid.
As secretary of state for parliamentary affairs from 2015 to 2019, Santos was the link between the minority Socialist government and the far-left parties backing it. That experience could be useful if the Socialists need support again.
Luis Montenegro, 51, is a lawyer who’s led opposition party PSD since July 2022. He was parliamentary party leader from 2011 to 2017, a period that included the years when his party was in government implementing a bailout program.
Even as the Socialists struggled in recent years with challenges including a surge in living costs, polls published before Costa resigned suggested that Montenegro wasn’t able to fully capitalize. Instead, Chega was the big winner.
When do people vote?
Campaigning ends on Friday night. People can vote from 8 a.m. on Sunday and exit polls are released at 8 p.m. in Lisbon.
The prime minister is nominated by the president after meeting each party and taking into account the election results. In the last election in 2022, the government was sworn in about two months after the vote. In 2019, it took about three weeks.
Most Read from Bloomberg Businessweek
How Apple Sank About $1 Billion a Year Into a Car It Never Built
The Battle to Unseat the Aeron, the World’s Most Coveted Office Chair
How Microsoft’s Bing Helps Maintain Beijing’s Great Firewall
©2024 Bloomberg L.P.
