President will call another snap election if Budget is rejected
That's according to a "source from Belém Palace" published by newspaper Correio da Manhã.
What?
On Thursday, the newspaper Correio da Manhã reported that President Marcelo Rebelo de Sousa has already decided that he will dissolve the Parliament and call new elections if the State Budget is rejected.
Citing “a source close to the Palace of Belém,” Correio da Manhã said that the President ruleds out the possibility of government by twelfths or the presentation of an amending budget.
The President’s main concern is the negative impact that the rejection of the Budget could have on the country.
Potential problems include a deterioration in Portugal's credit rating by the rating agencies and a further delay in payments under the Recovery and Resilience Plan (PRR).
These factors could worsen against a backdrop of global instability, especially with the uncertainty looming over the US elections.
Tell me more
If the Government fails to reach an agreement on the State Budget for 2025, the country could face its third legislative elections in less than three years.
So far, the executive has met twice with the opposition to discuss the budget proposal, but without reaching a consensus.
The Socialist Party (PS) has set the implementation of taxes benefits for the young and the reduction of corporate taxes as red lines, while far-right Chega is opposed to the idea of the Executive negotiating with the Socialists.
The President’s statements echo the October 2021 episode, when the Communists (PCP) and the Left Bloc indicated that they would reject the State Budget for 2022.
On that occasion, President Marcelo warned: “It’s very simple: either there’s a budget or there isn't, and I'm moving on to the process of dissolving Parliament.”
The country went to elections and António Costa secured an absolute majority.
Who’s the Belém source?
It’s Portugal worst-kept secret that whenever the media publishes reports on the basis of “a source from Belém” (as in Belém Palace, the official residence of the President of the Republic), the President spoke to them off-record.
What happens next?
The 2025 budget proposal must be presented to Parliament by 10 October.
After the general vote and specialised discussion, the final version will be voted on by MPs at the end of November.