Portugal faces a major political crisis in 2025. The centre-right minority government led by Prime Minister Luís Montenegro fell after losing a vote of confidence in parliament on 11 March 2025. This led to the country going to early elections for the third time in three years and created deep instability in Portuguese politics.
1. Reasons for the Fall of the Government
There have been allegations of corruption and conflict of interest in a company called Spinumviva, which is owned by Prime Minister Montenegro’s family. The criticism of the government’s economic reform policies by some groups and the evaluation of these reforms together with the corruption allegations have caused a loss of public confidence.
Portugal has recently been struggling with rising inflation and rising costs of living. The government’s economic policies have caused a backlash among low-income groups and increased dissatisfaction among the public.
Opposition parties such as the Socialist Party (PS), the far-right Chega, the Left Bloc (BE), the Portuguese Communist Party (PCP), Livre and the People-Animals-Nature Party (PAN) united against the government and managed to bring it down in a vote of confidence.
2. Consequences in Domestic Politics
With the fall of the government, the country has decided to hold early general elections in May 2025. This will be the third early election to be held in the last three years. Therefore, it is considered an important sign that political instability continues in the country. The constant election atmosphere makes it difficult for governments to produce long-term policies, while creating fatigue and distrust among voters.
As the election process begins, alliance possibilities between parties and the emergence of new political figures are being carefully monitored. The internal disagreements and corruption allegations that caused the fall of the government have become one of the main discussion topics of the election campaigns.
The increasing popularity of the Chega Party in recent years has led to radical changes in Portuguese politics. The party, known for its anti-immigrant, populist and nationalist rhetoric, is emerging as a strong alternative to the traditional center-right and left parties. Chega’s support is increasing, especially among young voters and those directly affected by the economic crisis.
This situation is forcing the traditional center parties to reconsider their strategies. The Socialist Party (PS) and the Social Democratic Party (PSD) may have to make sharper political maneuvers against Chega’s rise. In addition, considering Portugal’s democratic traditions, Chega’s increasing influence in parliament may lead to new constitutional and legal discussions.
How the balances in parliament will be shaped after the elections creates great uncertainty. In the current situation, it is predicted that no party will be able to come to power alone. This makes coalition governments and alliance talks even more critical.
In the coalition process:
• Center-left and center-right parties may form an alliance that excludes Chega.
• Chega and the center-right may form a government. However, this will cause major debates in terms of the EU and Portuguese democracy.
• If a government cannot be formed, a new election may be on the agenda. This may deepen instability.
The successive political crises have seriously shaken the public’s trust in political institutions. According to recent polls, more than 60% of voters say they do not trust the current political parties and are undecided about voting.
Young voters and the middle class in particular are distancing themselves from politics due to economic problems and social inequalities. This public distrust of political institutions may lead to the strengthening of far-right or radical left movements. In addition, civil society organizations, unions and university groups have begun to organize protests demanding political reform. With the fall of the government, uncertainty in public administration has increased and many reforms and bills have been suspended.
Young university graduates tend to leave the country due to unemployment and low wages. The acceleration of the brain drain has become one of the biggest problems threatening Portugal’s long-term economic and social development.
3. Impact on the European Union
Political instability in Portugal also has significant impacts on the European Union (EU) and general European politics:
• Management of EU Funds: The management of the €22 billion development funds that Portugal will receive from the EU may be at risk due to political uncertainty. This could negatively impact the country’s economic development projects.
• Threat of the Far-Right in Europe: The rise of the Chega Party is parallel to the strengthening of far-right movements across Europe. This trend could pose threats to the democratic values and integrity of the EU.
• Response by EU Leaders: The EU Commission is assessing the impact of the instability in Portugal on the Eurozone economy and is taking precautions against possible fluctuations in financial markets.
4) Economic and Social Impacts
The political crisis also has significant impacts on the Portuguese economy and society:
• Economic Uncertainty: Political instability could negatively impact economic growth by undermining investor confidence. Furthermore, the ineffective use of EU funds could disrupt development projects.
• Unemployment and Social Unrest: With the fall of the government, investors’ trust in the country may decrease. This could have negative effects on the job market. It is expected that unemployment rates, especially among the young population, may increase.
• Social Reactions: Political crises can lead to polarization and protest movements in society. Recent polls show that a large part of the public has lost trust in political elites.
• Increased Migration: Due to the economic uncertainty and instability in the country, the young population and skilled labor force have started to migrate to other European countries, especially Germany, France and the Netherlands. This situation could harm Portugal’s long-term economic growth.
As a result, the government crisis in Portugal threatens the country’s political and economic stability. The results of the early elections will be important not only for Portugal, but for the entire EU. The rise of the far-right and political uncertainty are a serious test of the EU’s democratic values and integrity. For this reason, both Portuguese politicians and EU leaders are following the situation closely and working to take the necessary measures.
