Portugal set to hold early election in May after minority government collapses

Portugal will hold an early general election on May 18, the country’s president announced Thursday, two days after a minority government lost a confidence vote in parliament and stood down.

President Marcelo Rebelo de Sousa, who has no executive power but can dissolve parliament and call elections, described the government’s collapse as a shock that was neither “expected nor wanted.”

In a televised address to the nation, he urged voters to participate actively in the European Union country’s third general election in three years, saying the continent faces stiff challenges to its security and economy that require political stability.

The centre-right government’s fall on Tuesday amid questions about the prime minister’s conduct brought the worst bout of political instability since Portugal adopted a democratic system more than 50 years ago in the wake of the 1974 Carnation Revolution, which ended a four-decade dictatorship.

Portugal, which has a population of around 10.6 million people, has had a series of minority governments in recent years as the traditional rivals for power, the centre-right Social Democratic Party and the centre-left Socialists, lost votes to growing smaller parties.

The minority governments have been unable to build compromises that might ensure an administration completes its constitutional four-year term without opposition parties teaming up to block its policy proposals and bring it down.

The ballot deepens political uncertainty just as Portugal is in the process of investing more than €22 billion in EU development funds.

Voter discontent with a return to the polls could bring dividends for the right-wing populist party Chega (Enough), which has fed off frustration with the two mainstream parties.

Portugal has been caught up in the rising tide of European populism, with Chega surging into third place in last year’s election.

The government, led by the Social Democrats in an alliance with a smaller party, fell amid a controversy that has revolved around potential conflicts of interest in the business dealings of outgoing Prime Minister Luís Montenegro’s family law firm.

Montenegro, who says he’ll stand for re-election, has denied any wrongdoing. He said he placed control of the firm in the hands of his wife and children when he became Social Democratic leader in 2022 and has not been involved in its running.

It recently emerged that the firm is receiving monthly payments from a company that has a major gambling concession granted by the government, among other sources of revenue.

The Socialists demanded a parliamentary inquiry into Montenegro’s conduct.

The Social Democrats are hoping that economic growth estimated at 1.9% last year, compared with the EU’s 0.8% average, and a jobless rate of 6.4%, roughly the EU average, will hold their support steady.