Budget Debate and Party Roles in Portugal’s Parliament
The Socialist Party in Portugal secured an absolute majority in Parliament this Friday as the governing bloc. Only the PAN and the Europeanist party abstained from the budgets, while Livre, each represented by a single member, aligned with the majority to support the measure. The remaining parties, both on the left and the right, criticized the approach with sharp remarks. Prime Minister António Costa, while clearly seeking dialogue, nonetheless rejected most of the amendments proposed by other groups. With the budgets approved, the government marked a clear divergence from its previous leftist partners, amid economic instability and rapidly rising inflation.
A central point of contention centered on pensions. The government argues that retirees will not see a loss in purchasing power, thanks to an extra salary in October and a projected increase between 3.53% and 4.43% for the coming year. Opponents contend that these increases fall short of what the law calls for, suggesting adjustments should be tied to the consumer price index and GDP growth. The socialist bloc backed an upward revision if inflation exceeds expectations, but other parliamentary groups deemed the plan insufficient.
Criticism of Socialists
The main opposition, the Social Democratic Party, accused the socialists of limiting debate to a simple majority approval of the budget. Of the 1,800 proposed amendments, Costa’s party accepted roughly a hundred, mostly from the PAN and Livre. The influence of former left partners like the Left Bloc and the Portuguese Communist Party has waned, with many accusing the government of bargaining primarily with large firms. Both sides labeled the executive as ineffective in its implementation, including a 33% tax on extraordinary profits from major energy companies.
But the government pressed forward with measures aimed at families and not at corporate balance. Initiatives included an average salary increase for civil servants of about 3.6% and reductions in income taxes for low-income households. The government projected a debt-to-GDP ratio of 110.8% for the next year—four percentage points lower than the current level—and a budget deficit near 0.9%, despite the anticipated slow-down for 2023. The fiscal approach labeled contas certas remained a guiding priority in balancing income and expenditure.
Conflict with the Far Right
Socialist spokesman Eurico Brilhante Dias emphasized the party’s willingness to engage with all democratic formations, underscoring ongoing negotiations with a broad spectrum of groups. The far-right, represented by Chega, rejected the notion that any government proposals received broad endorsement. Its leader, André Ventura, noted that deputies are elected under the same democratic rules as the rest of the chamber, insisting that public statements should respect institutions and parliamentary debate. The party argued that it did not endorse any of the contested amendments, signaling a deliberate separation from the process of negotiation with the left and other blocs.
Near five hundred amendment suggestions from Chega were not accepted, underscoring the portrayal of the far right as an isolated force in parliamentary matters. Ventura’s stance frames Chega as the sole party in opposition while the rest of the chamber moves forward with the budget. Despite this mounting tension, the Socialists gave their approval to the first full budgets since gaining an absolute majority at the start of the year. The financial outlook for subsequent years remains subject to political contestation, suggesting that confrontations with other formations could intensify as the agenda proceeds.