Once known for its political stability, Portugal now faces a period of upheaval following President Marcelo Rebelo de Sousa’s decision to dissolve parliament and call snap elections for May 18, 2025. The move follows the collapse of Prime Minister Luís Montenegro’s minority Social Democratic government amid a growing political crisis.
What Led to the Crisis?
The turmoil began when allegations of conflicts of interest surfaced regarding Spinumviva, a data protection firm linked to Montenegro’s family. Despite surviving two no-confidence votes, Montenegro's refusal to submit to a parliamentary inquiry and his request for a confidence vote backfired—his Social Democratic Party (PSD) lost, forcing the president to call elections.
This marks Portugal's third election in just over three years, highlighting an unexpected period of political instability. The previous government, led by António Costa and the Socialist Party (PS), collapsed in November 2023 amid corruption investigations. Montenegro’s PSD formed a minority government in April 2024, relying on the opposition Socialist Party to pass its budget.
A Tight Race Ahead
Recent polls indicate a close contest between the PSD and the Socialist Party, both hovering around 30% support. Meanwhile, the right-wing populist Chega party remains a significant force, despite internal scandals that have eroded its backing.
The political uncertainty comes at a critical time for Portugal, which is set to invest over €22 billion in European Union development funds. Despite the instability, Portugal’s economy remains strong, outpacing the EU average in growth. Forecasts predict GDP growth of 1.9% in 2025 and 2.1% in 2026, compared to the EU averages of 1.5% and 1.8%, respectively. This reflects a remarkable five-year economic convergence cycle, one of the longest in the EU.
Key Election Issues
Several key issues will shape the election:
- Corruption and government transparency – A series of scandals has eroded public trust in political institutions.
- Economic challenges – Rising costs of living, housing shortages, and wage stagnation continue to pressure the government.
- Tourism and foreign investment – Portugal must balance economic gains from tourism with concerns about housing affordability and local displacement.
- Energy and environmental policies – Controversial lithium and hydrogen energy projects, central to the recent corruption scandal, remain highly debated topics.
A Historic Turning Point
President Rebelo de Sousa has called for a calm and dignified electoral debate, emphasizing the need for stability and clear leadership. However, this election will be a defining moment—will Portugal continue its traditionally left-leaning path, or shift in line with Europe’s broader rightward trend?
Until May 18, Portugal will be governed by a caretaker administration with limited powers. Once the election results are in, coalition negotiations could take weeks, as no single party is expected to win an outright majority. The future of Portugal’s political landscape remains uncertain, but its outcome will determine how the nation navigates both domestic and international challenges in the coming years.
Portugal, founded in 1143, was once a dominant maritime power in the 15th and 16th centuries. It saw its global influence decline due to a series of historical upheavals. The 1755 Lisbon earthquake devastated the capital, followed by Napoleonic invasions and the loss of Brazil, its wealthiest colony, in 1822. In 1910, a revolution overthrew the 800 year monarchy, ushering in decades of authoritarian rule. The Carnation Revolution of April 25, 1974 ended dictatorship and paved the way for democracy and decolonization. Today, Portugal is a founding member of NATO and has been part of the European Union since 1986.
By Jayme Simoes, WACNH Board Member
