Portugal’s new government aims to outmanoeuvre radical populist rivals

The new center-right minority government in Portugal took office on Tuesday, soon after its parliamentary test underscored the challenges and possibilities it faces following the rise of a radical right populist party in the recent general election.

Only one of the 17 ministers sworn in at a ceremony in Lisbon’sAjuda National Palace has previous top-level government experience.Prime Minister Luis Montenegro, who promised a Cabinet made up of specialists from outside the usual political circles, has not previously served in any government role.

Some key members of the Cabinet have spent time in Brussels and are familiar with the European Union’s corridors of power. They include Foreign Minister Paulo Rangel and Defence Minister Nuno Melo, who were European lawmakers from 2009. 

Finance Minister Joaquim Miranda Sarmento, a professor at a Lisbon university, is expected to play a key role in the new administration’s efforts to curb historically ruinous government overspending. He advocates for fiscal policies that encourage investment and savings.

Montenegro, the new prime minister, vowed to deliver on his election promises of lower taxes, higher salaries and pensions, and improved public services by making the economy more competitive and the government more efficient.

The government will lower corporate tax from 21% to 15% over the next three years, he said in a speech.

Last month’s election saw an alliance headed by the Social Democratic Party secure a slim victory, obtaining 80 seats in the 230-seat National Assembly, the parliament of Portugal.

The centre-left Socialist Party, which for decades has alternated in power with the Social Democrats, secured 78 seats.

A new ingredient is adding to the political unpredictability around the minority government’s prospects: the Chega (Enough) populist party picked up 50 parliamentary seats, up from just 12 in a 2022 election, on a promise to disrupt what it calls the establishment’s politics-as-usual.

As a result, the election of the parliament’s speaker last week presented an unprecedented problem and led to an unprecedented solution.

The Chega party made good on its promise to upset the old way of doing things, standing in the way of the incoming government’s candidate for speaker and delivering an embarrassing defeat for Montenegro, the new prime minister and leader of the Social Democratic Party.

Chega leader Andre Ventura wants the Social Democrats to join his party in a right-of-centre parliamentary alliance, which would secure an overall majority and position Chega at the core of power. However, Montenegro has thus far rejected this proposal.

Instead, Montenegro left Chega out in the cold by striking a deal with the Socialists, his party’s traditional rival, for a speaker named by each party to serve two-year terms.

It’s the kind of deal Montenegro may be forced to do again over the next four years.

On Montenegro’s immediate to-do list is dousing some political fires. He has vowed to quickly address shortcomings in public health care, especially long waiting lists for treatment, and a housing crisis, as well as resolve simmering disputes with police and teachers over pay and work conditions.

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