Portugal’s government falls in no-confidence vote

Portugal will have to go to the ballot boxes in May – the third time in just over three years – after its centre-right Democratic Alliance (AD) government fell on Tuesday after a confidence vote was rejected by its parliament.

The year-old government led by Luís Montenegro, which controls far less than a majority, was ousted after a controversy over the Prime Minister’s business dealings revealed clear conflicts of interest.

The country is facing its worst period of political instability since the 1980s in what is widely seen as a tit-for-tat revenge by the main opposition PS socialist party led by Pedro Nuno Santos after its government led by António Costa (now the President of the European Council) was brought down in December 2023 by an alleged traffic of influence scandal involving lithium exploration schemes and a multi-million-euro data centre project. The mud never quite stuck but the crisis then was thought to have been engineered by the PSD party which is part of the current governing coalition regime.

With the country’s leadership now in flux, it falls to President Marcelo Rebelo de Sousa to exercise his constitutional right to dissolved parliament and call for snap elections for May.

It is a situation that recent polls show that the Portuguese people really don’t want, instead calling for stability and continuity.

Frighteningly, it also paves the way for the far-right populist party Chega, which had an 18% share of the vote at the last elections, to increase its share and possibly act as kingmaker if the PSD-led coalition wins again.

If the PS socialist party wins but fails to get a majority, it may have to do a deal with the minor parties including the far-left Bloco de Esquerda and PCP Communist parties which it had done in its first term of two in government between 2015-2019.

It was telling that as the scandal developed, Chega’s leader, André Ventura, pulled out of the race for the presidential elections which will probably take place in January, 2026 after the current president, Marcelo Rebelo de Sousa terminates his second and final term in office.

All of the opposition parties, with the exception of the coalition parties and Liberal Initiative, voted against the motion of confidence in the government.

The Prime Minister had even offered to suspend the session if the PS MPs presented specific questions, but the PS leader Pedro Nuno Santos refused to back down.

The scandal surrounding the Prime Minister and his business dealings revolve around a consultancy company called Spinumvia set up by Luís Montenegro which continued to receive fees from clients even after he was elected PSD president and leader of the opposition in 2022 and had transferred ownership of the consultancy to his wife and two sons.

The legality of the transfer to his wife was questioned by the opposition given that the marriage is one in which assets are jointly held. The couple have since made their sons the sole owners.

Another problem is that the company’s clients include the casinos group Solverde whose gambling concession granted by the government is up for review, creating a clear conflict of interest and possible case of traffic of influence given that until literally days ago the company was receiving €4,500 a month from Solverde for consultancy services.

The situation was only made worse when the Prime Minister refused to name other company clients to which Spinumvia offers consultancy services.

Luís Montenegro, a lawyer by profession, had argued that the consultancy work referred to data privacy laws and that it had been outsourced to experts since his wife is a child minder, one of his sons is a student and the other a recent university graduate.

Portugal’s lawyers’ association is now looking into whether the company is illegally offering services that only lawyers may offer.

This week the Prime Minister’s decision to go to the country rather than face a public enquiry into his business dealings, was slammed by the leader of the main PS opposition party as an “act of cowardice”.

To avoid a political crisis, the PSD asked for the parliamentary session yesterday to be suspended for half an hour so that the Prime Minister could meet behind closed doors with Pedro Nuno Santos so that the two could thrash out a solution that would avoid a general election.

The PS’s parliamentary leader, Alexandra Leitão, also argued that “countless questions” had been put to the prime minister in “all sorts of ways”. “The prime minister didn’t want to or couldn’t answer,” she said, saying that “what we’ve seen is proof that the government and the prime minister are desperate.”

In parliament the vote of confidence motion proposed by the government was roundly rejected by all opposition bench parties (Chega, PS, PAN, Livre, PCP, Bloco de Esquerda save the governing coalition parties IL (Iniciativa Liberal), PSD and and CDS-PP.

Today, (Wednesday March 12), the leaders of the political parties will meet with the Portuguese president, while on Thursday there will be a meeting of the Council of State. This will be almost certainly followed by the president’s decision to dissolve parliament.

When the elections are held in May – and Luís Montenegro says he will stand for reelection – the coalition is hoping that Portugal’s solid economic track record which puts it ahead of many of its European rivals in terms of growth and budget, sovereign debt control and low unemployment will be enough to persuade the electorate to give it a second chance.

Image: Portugal’s President, Marcelo Rebelo de Sousa (R) speaks with Portuguese Social Democratic Party (PSD) leader Luis Montenegro (L) during a meeting as part of the hearing of political parties with parliamentary seats to discuss the political crisis and the scenario of snap elections, at the Belem Palace in Lisbon, Portugal, 12 March 2025. The president of Portugal will talk to the political parties with parliamentary seats at the Belem Palace on Wednesday to discuss the political crisis and the scenario of snap elections. EPA/ANTONIO COTRIM
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