Saturday, March 22, 2025

Brussels Edition: Portugal's election treadmill

Portugal will soon hold its third snap election in just over three years
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Welcome to the weekend issue of Brussels Edition, Bloomberg's daily briefing on what matters most in the heart of the European Union. Join us on Saturdays for deeper dives from our bureaus across Europe.

LISBON — While the rest of Europe is grappling with how to keep up with President Donald Trump's abrupt shifts to US policies, Portugal is once again consumed by domestic political struggles. 

Parliament met in Lisbon for a final time this week before it was dissolved ahead of the country's third snap election in just over three years.

"It's as if we're in a car race in which the Portuguese car pulls into the pits every lap to change tires," said Pedro Castro e Almeida, the head of Banco Santander's Portuguese unit.

The center-right minority government was toppled by parliament on March 11 after losing a confidence vote that Prime Minister Luis Montenegro had requested himself after serving for one year. The collapse may delay some key decisions, including a plan to privatize state-owned airline TAP.

Portugal's outgoing Prime Minister Luis Montenegro talks to journalists in Belem Presidential Palace on March 13. Photographer: Horacio Villalobos/Corbis News

President Marcelo Rebelo de Sousa, who called the snap election for May 18, said nobody wanted this early vote.

Both opposition Socialist leader Pedro Nuno Santos and Montenegro say they're in favor of political stability, and have tried to avoid being blamed for causing another early election. They blame each other.

The premier requested the confidence vote the week before he was ousted, saying he wanted to clarify whether his government had the support to carry out its program. He'd been struggling to put an end to speculation about potential conflicts of interest related to a company owned by his family, something likely to come up again during the campaign.

The Socialists, who had helped the government's budget pass in November but always warned they wouldn't back confidence motions, and far-right party Chega both voted against the government.

Montenegro, 52, plans to seek reelection. It will likely be a close race again against Socialist leader Santos, 47, who is often linked to the leftmost wing of his party, according to recent opinion polls. None of the surveys indicate the ruling coalition or the Socialists will be able to get a majority in parliament on their own.

Pedro Nuno Santos, Secretary General of the Socialist Party. Photographer: SOPA Images/LightRocket

Minority governments in Portugal have tended to be short-lived: In 50 years of democracy, only two have survived a full four-year term. The Socialists and Montenegro's center-right PSD party, the senior partner in the AD coalition, have dominated politics over those five decades. Still, new parties have been formed and are challenging the two main competing centrist groups.

Chega has emerged as a new force, quadrupling its number of seats in parliament in the last early election in March 2024. While Montenegro could have secured majority support in parliament by forging a deal with the far-right party, he ruled out an agreement to get its backing.

Andre Ventura, a former tax inspector who leads Chega, has appealed to a growing number of disgruntled voters by blaming successive center-left and center-right governments for what he says is systemic corruption in Portugal.

Portugal may just be catching up with other European democracies when it comes to fragmentation of party politics and the surge in far-right support.

"Portugal was one of the last to resist the emergence of these radical right-wing populist forces, but we are also no longer the exception," said Isabel David, an associate professor at the Institute of Social and Political Sciences of the University of Lisbon.

Joao Lima, Lisbon bureau chief

Weekend Reads

Europe Is Short of Gunpowder and TNT When It Needs Them Most

Different batches of gunpowder pellets are mixed to create a homogeneous end product at the Nitrochemie Aschau factory in Aschau am Inn, Germany, on March 5. Photographer: Laura Alviz/Bloomberg

The last stages of gunpowder manufacture at Nitrochemie Aschau look a bit like making pasta. Since Russia's full-scale invasion of Ukraine in 2022, the factory has increased production capacity by 60% and is building new facilities to add 40% more by mid-2025 to meet Europe's surging demand. However, the supply chain that explosives manufacturers rely on is tangled, global, and full of bottlenecks. 

Defense Boom Lures European Auto Suppliers Betting on Turnaround

Martin Büchs' family business in small-town Bavaria has been supplying gearshift and engine-cooling systems to carmakers for more than a century. With Europe's automotive sector in turmoil, Büchs is trying to reinvent his company, Jopp, as a supplier to one of the country's fastest growing industrial sectors: the military.

VW Is Cutting Thousands of Jobs But Still Dwarfs Global Rivals

Job cuts are coming thick and fast from Volkswagen. Just since December, it's announced plans to reduce its German workforce by 35,000 over five years, to cull 1,900 positions at Porsche and 7,500 at Audi, and to shrink its software business by roughly a third. But a closer look shows that even if VW follows through with all these moves, it will still employ far more people than its peers.

Peak Paris? Global Banks Put Their French Hiring Plans on Ice

Since last summer, international banks in Paris have quietly shelved expansion plans that would have added, in total, hundreds of new roles. Some banks have begun small-scale layoffs. Privately, executives say that political instability, higher taxes and economic malaise are the driving factors. 

Trump Has Companies in Europe and Asia Walking a DEI Tightrope 

Donald Trump's executive order dismantling diversity, equity and inclusion efforts is making waves at international companies in Europe, Asia and beyond — but only on the surface. Quietly, many businesses are standing firm on diversity initiatives. 

This Week in Europe

  • Monday-Tuesday: EU agriculture ministers meet in Brussels; EU health ministers hold informal meeting in Warsaw
  • Tuesday: Hungary interest rate decision
  • Wednesday: Czech rate decision
  • Thursday: European leaders meet in Paris to discuss Ukraine; EU environment ministers meet in Brussels; Norway rate decision

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