Friday Briefing: Portugal on the brink of elections

Good morning and welcome to PORTUGAL DECODED. This week, just as Portugal began healing from the fires, budget negotiations took a bad turn. Here's why it's a high-stakes electoral poker game.

TALK OF THE TOWN

@DKNG Studios

POLITICS

Admiral Henrique Gouveia e Melo, Chief of Staff of the Navy, is the favorite to succeed Marcelo Rebelo de Sousa as the next President, a new opinion poll revealed (More).

The Government admitted that a Portuguese-flag vessel is carrying explosives that are ultimately destined to Israel, prompting the Left Bloc to intensify demands for the flag’s removal. Yet, experts say it’s more complex than it seems (More).

SOCIETY

The death toll from last week’s wild fires rose to nine. Yesterday, the Government announced a financial support package for the areas affected by the fires worth 500 million euros (More).

Lisbon’s Nova University will launch a training program in October aimed at over 50 year olds and foreign citizens residing in Portugal covering topics such as democracy, populism, world politics, social networks and “fake news” (More).

ECONOMICS

Portugal swung to a stronger-than-expected budget surplus of 1.2% of GDP in the first semester of 2024, better than the 1.1% of GDP achieved in the 1st half of 2023, indicated the National Statistics Institute (More).

The Competition Court upheld a 225 million euros fine imposed on 12 Portuguese banks for exchanging sensitive information on the supply of retail banking credit products, in the case known as the “banking cartel” (More).

CULTURE AND SPORTS

Belgian street artist, Jaune, paid tribute to Portuguese firefighters by drawing 16 small paintings of them on park benches, electricity boxes and walls in Estarreja town centre (More).

Often described as Portugal’s greatest living author, Antonio Lobo Antunes has stopped writing due to dementia, his biographer revealed this week (More).

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DECODER

Portugal’s three-way political poker

To recap Portugal’s current political context: read this previous DECODER.

To recap this week’s events: see this infographic.

The moment of truth has arrived: the 2025 State Budget negotiations are here and they couldn’t gotten off to a worst start this week. Parties leaders exchanged accusations about their willingness to negotiate, President Marcelo suggested that a no-deal would trigger a snap election and PM Montenegro said he wouldn’t rule without a budget. For now, they are just that … words. In this high-stakes political poker game, everyone is looking to bluff their rivals and waiting for the right moment to show their cards. Here’s your essential guide to the greatest show in town:

What’s the prize?

All three players recognise that the current political situation is highly volatile and want to increase their vote share: the Government wants to win a majority (or, at least, to form a majority with the liberals); the Socialist want to form a Government; and Chega, well, wants more power. They all appear to believe that they can achieve this by blaming the other two parties for bringing voters back to the ballot boxes. This explains why the Government and the Socialist party spent good part of this week blaming each other for not holding budget talks earlier and Chega’s André Ventura accused both of them of wanting to provoke elections.

What cards do they have?

The Socialists say they’ll reject the budget if the Government keeps two proposals: 1) a gradual reduction in corporate income tax from 21% to 15% until 2028; 2) and a maximum tax rate of 15% for under 35 year olds. The Socialists argue that the first measure only benefits big corporations and has significant weight on public finances; and the second measure only benefits young peoples with wages over 1500 euros. In turn, Chega has demanded a referendum on immigration, reinforcement of borders and review of “subsidies for foreigners,” and the exclusion of the Socialists from the negotiations. The Government hasn’t responded to Chega’s demands.

Who’s got the stronger hand?

PM Montenegro. For starters, he’s the incumbent so it’s easier for him to convince Portuguese voters to keep him where he is. He also has the state’s instruments at his disposal and a much improved public accounts situation. He has used this generously, negotiating wage increases for 42% of public workers, giving extra bonuses to pensioners, boosting housing projects and, more recently, proposing increases to the minimum wage. In fact, though he says the opposite, he might want elections now. His dilemma is knowing whether this hand is strong enough to get what he wants.

Who’s the hardest to read?

Socialist leader Pedro Nuno Santos. In March, he said that it would be “practically impossible” to approve the budget but then, months later, suggested that he was willing to reach a deal with the Government. His hesitation might be sincere: he faces a tough choice between approving the Government and enduring internal party opposition; or rejecting the budget and losing another general elections and, then, his party’s leadership. However, it could also be calculated: he might want to remain ambiguous about his choice so as to claim victory in one or another direction.

Who’s likely to be the biggest bluff?

Chega leader André Ventura. At the end of August, he announced with great fanfare that Chega would withdraw from the negotiations and that “in all likelihood it will vote against” the Government’s budget. Yet, this week, he “secretly” met with the PM in São Bento Palace to discuss the budget. He has also admitted to approve the tax benefits for the young and the cuts to corporate income taxes - the two proposals that are red lines for the Socialist party. He does so because he knows that Chega is likely to loose some of its current 50 MPs - its largest seat haul ever - in the event of a snap election and, therefore, he may be convinced to approve the budget at the 25th hour.

What happens next?

Today, PM Montenegro and Socialist leader Pedro Nuno Santos will host budget talks at 3pm at São Bento Palace. Watch out - there could be interesting developments. Next week, on October 1, the President hosts the Council of State, where all three leaders and the other Counsellors of State will discuss the budget negotiations. Until October 10, the Government will present its budget proposal. The proposal will be voted at first reading on October 30-31. The President has announced that he will host another Council of State between then and the final vote date, on November 28.

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TIPS OF THE WEEK

Lisbon

MAAT 8th Anniversary

@michiel-annaert

Praça do Carvão, at Maat Garden, will be the epicentre of MAAT’s 8th anniversary celebrations, between October 4-6, including performances, visits, workshops and food trucks. The programme includes various free activities, a street market featuring jewelry, decoration and handicrafts running, and innovative event that celebrates the fusion of art, music, gastronomy and market - the Block Party at MAAT. From 12:00 to 19:00 the event is free, however, on the 4th and 5th, the organization will present two parties starting at 20:00, with a line up of house artists, such as Groove Armada, DOT and DJ Shugi, passing through afro house and electronica. Tickets are already on sale here.

Porto

Autumn Party

@Serralves Foundation | André Delhaye⁠

On September 23-24, families and the general public are invited to Serralves Park, from 10am till 7pm, for a celebration involving workshops, trails, theatre and music shows, performances and other activities. This year's edition coincides with the 100th anniversary of Serralves Park. To this end, the programme is vast and features various artistic and educational activities, with an emphasis on the rural dimension, food production and indigenous breeds. Access is free through the gates at Avenida Marechal Gomes da Costa and Rua Bartolomeu Velho, 141. More information here.

Almada

Trafaria Com Prova 2024

One of my favourites programs in Lisbon is to take the ferry from Belém to Trafaria on the other side of the Tagus river and eat fresh fish with one of the best views around. This weekend, there’s another reason for doing it. The Trafaria Com Prova, on September 27-29, offers a mostly free program of guided wine tastings, typical regional snacks, bike rides, live music, and various recreational activities for the whole family. Visitors can taste wines from several national producers, explore the gastronomic traditions of local restaurants, and indulge in specialties from Almada’s pastry shops.

Santa Maria da Feira

Craft Beer Festival

It may not be Octoberfest but Santa Maria da Feira sure knows how to put up a beer party. Now in its sixth edition, the Festival of Craft Beer returns to Quinta do Castelo on October 3-6, with a larger venue, more brewers and food. The Festival aims to surprise with the presentation of exclusive, limited edition craft beers produced with fresh hops - an essential plant for brewing beer and a natural preservative - grown on the banks of the River Cáster. This year, the fresh hops are joined by another star from the municipality, with the launch of a Fogaça da Feira craft beer, in an ‘exclusive and limited edition’. Entrance is free. More information here.

Mértola, Beja, Serpa and Castro Verde

Futurama Festival

The Futurama Festival, which combines local traditions from the Baixo Alentejo region with contemporary art, kicks off this Friday and will take place in three municipalities in the district of Beja, presenting a ‘collaborative, inclusive and cross-border’ programme. Cultural and heritage venues in Serpa (27 and 28 September), Mértola (5 October) and Beja (11 and 12 October) are the stage for artistic experimentation and dialogue between music, literature, theatre, installations and workshops, with local, national and international artists and artistic collectives. All the program is free entrance.

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COMMUNITY CORNER

A few weeks ago, reader Shoba Satya - a retired US acupuncturist and a resident of Nazaré since 2022 - proposed to write a report on an event she attended to look for solutions to the housing problem in Portugal: “As a resident of one of the many hundreds of Portuguese cement and rebar apartment buildings that are now at the end of their lifecycles (love the location and the view, but concerned about the rust and crumble), I am interested to explore 21st century building technology that will be the right and best choice for Portugal’s next step.” Head over here to read Shoba’s report. And thanks for sharing it with us.