Portugal Public Policy

Portugal Public Policy

Current policy

Portugal is a country located in the region of Southern Europe. Portuguese politics is largely characterized by the aftermath of the serious economic crisis that the country went through from 2008. Since 2015, the country is ruled by the Socialist Socialist Party (PS). The government has continued to pursue a strict economic policy, but has also raised pensions and minimum wages and lowered taxes for low-income earners. In the 2019 elections, PS strengthened its position but failed to reach its own majority and will therefore continue to depend on support from one or more parties.

The bourgeois government alliance, Forward Portugal, which came to power after the re-election to the National Assembly in 2011 had continued the former Socialist government’s austerity policy, with cuts in state finances to overcome the high budget deficit. Forward Portugal described the 2015 election as a referendum on the strict austerity policy, while the Socialist Party promised to ease the austerity measures.

Forward Portugal got 37 percent of the vote against 32 percent for the Socialist Party, but none of them got their own majority in the National Assembly. The parties to the left of the Socialist Party – the Communist Party, the Greens and the Left Bloc – made a good choice.

President Aníbal Cavaco Silva commissioned PSD to form government and PSD leader Pedro Passos Coelho was appointed head of government. Cavaco Silva pointed out that no democratically elected Portuguese government had depended on the support of the left, “who wants to abandon the euro and leave NATO”. He said he would do everything he could to keep them out of government. Socialist Party leader António Costa criticized the president’s decision and promised to try to topple a new bourgeois government as soon as possible.

The Socialist Party takes over government power

A few weeks later, Prime Minister Pedro Passos Coelho’s ministry fell after a vote of no confidence in the National Assembly. Reluctantly, the president commissioned the socialist leader Costa to form a government. Three days later, a minority government comprising the Socialist Party, which was supported by the National Assembly of the Left Bloc, the Greens and the Communist Party, took office. The new government was received with some skepticism by both the EU and the financial markets.


Tensions soon arose around the new budget, when the Socialist Party advocated that the government should meet the EU’s demands on the size of the budget deficit, while the support parties wanted through larger social initiatives. Costa faced a difficult task, as it was about retaining their support while remaining within the financial framework set by the EU and not acting so as to discourage foreign investors.

The presidential election in January 2016 became a setback for the left parties, as PSD candidate Marcelo Rebelo de Sousa already won in the first round. The new president was known from TV, where he commented on politics (and sports), including in his own program. After the election, both Rebelo de Sousa and Costa made statements that they were prepared to cooperate with each other to avoid a political crisis.

Budget work was delayed, and the government had to revise its proposal following criticism from the European Commission. Only in March 2016 was a budget that was approved by both the Portuguese Parliament and the European Commission. This included increases in certain salaries and pensions, at the same time as new taxes were introduced on, among other things, bank transactions (see Financial overview).

Complicated relationships with the support parties

When the European Commission reported in May 2016 on how the euro area countries had met the Union’s budgetary requirements, it emerged that Portugal, together with Spain, did not. At first, political decisions were postponed for possible action, but in July it seemed as if the EU would still punish both countries, for the first time in the Union’s history. In the end, however, they did not give up any fines, the countries were given more time to take action (see further Economic overview).

At times, the Socialist Party’s relations with the support parties have been troubled. One reason for this is that the government party has concluded individual cooperation agreements with the support parties and must therefore negotiate each measure with each of them. At the same time, the government and Prime Minister Costa have relatively strong support in public opinion, around 40 percent at the end of 2016.

The influence of the support parties seemed to diminish from spring 2018 when the Socialist Party and the Social Democrats agreed on several reforms, including that the municipalities would be given greater powers and a strategy for how Portugal would use the money from EU structural funds in the coming years.

Although there were several clouds of concern regarding the economy, in addition to the large government debt and the weak banks, there were also positive signs that several large foreign companies, such as Volkswagen and Bosch, had increased their investments in Portugal, or planned to do it. By 2018, the government had largely eradicated the budget deficit, and the government debt was gradually declining. At the same time, it was clear that the necessary investments, including in the transport sector, were lagging behind, which also hampered the development of the important tourism industry. The lack of skilled labor, in both the tourism and the automotive and textile industries, also hampered the development. This was due to both a low level of education (only about a quarter of the adult population has post-secondary education) but also that many well-educated Portuguese had emigrated during the crisis years. Another problem was that many banks had problems with bad loans.

The Socialist government was also criticized for offering residence permits to wealthy foreigners who bought properties in Portugal (and with the possibility of gaining Portuguese citizenship after six years).

At the same time, there was a growing dissatisfaction with high housing costs and low wages in the public sector, where nurses as well as teachers and prison guards were striving to demand wage increases.

The 2019 election

In the 2019 parliamentary elections, the Socialist Party became the largest party, but failed to win its own majority (see Calendar). Prime Minister António Costa also chose this time to form a minority government, but this time there were no formal agreements with other parties.

Read more about the events in the Calendar.


Official name

Republic of Portugal / Republic of Portugal


republic, unitary state

Head of State

President Marcelo Rebelo de Sousa (2016–)

Head of government

Prime Minister António Costa (2015–)

Most important parties with mandates in the last election

Socialist Party (PS) 108, Social Democrats (PSD) 79, Left Bloc 19, Democratic Unity Coalition 12, People’s Party (PP) 5, People, Animals and Nature (PAN) 4, Chega 1 Liberal Initiative (IL), Livre 1 (2019)

Main parties with mandates in the second most recent elections

Forward Portugal (including Social Democrats, PSD) 102, Socialist Party (PS) 86, Left Bloc 19, Communist Party 17, and two smaller parties (2015)


54.5% in the 2019 parliamentary elections, 49% in the 2016 presidential election

Upcoming elections

parliamentary elections 2023, presidential elections 2021



President Cavaco Silva supports the austerity policy

In the election campaign, Cavaco Silva benefits from the Portuguese’s dissatisfaction with the tough economic policies of the Socialist government, but after the election victory, the new president gives his support to the government’s attempt to balance the budget.

Civil victory in the presidential election

PSD candidate Cavaco Silva wins the presidential election by a wide margin already in the first round. He thus becomes the first bourgeois politician of modern times to win a presidential election. Cavaco Silva gets 51 percent of the vote against 21 percent for Alegre, who comes second. Soares receives 14 percent of the vote. The turnout is 63 percent.

Scandal with sex abuse and illegal interception is discovered

In the middle of the presidential campaign, a tapping scandal sails up. Some 60 politicians and judges must have been intercepted illegally by the National Prosecutor’s Office. The interception must have taken place in connection with an investigation of sexual offenses committed against children in one of the country’s largest orphanages.

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