Published by Global Banking and Finance Review
Posted on March 5, 2025
By Sergio Goncalves and Andrei Khalip
LISBON (Reuters) -Portugal's prime minister proposed on Wednesday a confidence vote in his year-old minority government, risking his own dismissal as the main opposition parties vowed to defeat him.
At the centre of the political crisis that could trigger a third early election since 2022 is a consultancy firm owned by Prime Minister Luis Montenegro's family, which has made contracts with private companies that the opposition says have benefited the premier.
Montenegro has denied any conflict of interest.
"The country needs political clarification and this is the moment," Montenegro told parliament.
"Having an early election would be a necessary evil ... to end the atmosphere of permanent insinuations and intrigues," he told lawmakers debating a no-confidence motion presented by the Communist Party, which parliament ended up rejecting.
Montenegro's motion first needs cabinet approval and is unlikely to be voted before next Wednesday.
If lawmakers reject it, the government would fall and assume a caretaker role, pending a decision by President Marcelo Rebelo de Sousa on whether to dissolve parliament and call fresh elections, which many analysts consider likely.
Speaking to reporters, the president would not pre-commit to any scenario, saying he would meet the ruling parties and his consultative Council of State after the vote and then decide. If an election were unavoidable, the earliest dates would be May 11 or 18, he said.
"I have an obligation to think about the possible election calendar... I have to minimise the costs in terms of effects and maximise the speed in dealing with the situation," he added.
Montenegro's party has said he would lead it in any new election.
The main opposition Socialists and far-right party Chega, which together have 128 seats in the 230-seat house, said they would reject a motion of confidence. Since the restoration of democracy in 1974, only one out of 11 such motions has been rejected by parliament, in 1977.
"The prime minister knows that the Socialists will reject the confidence motion. The responsibility for the political crisis is yours alone," said Socialist leader Pedro Nuno Santos, asking Montenegro, "Why don't you just resign?"
Portugal, Western Europe's poorest country, is growing faster than most EU members, at around 2% with budget surpluses, but is struggling to contain a housing crisis.
The government has been preparing the privatisation of TAP airline, in which several key industry players have shown interest, a tortuous process that now risks stalling again.
LEGAL WRANGLE
Montenegro founded data protection consultancy Spinumviva in 2021 when he had no political job.
The following year, he was elected leader of the centre-right Social Democratic Party and left the ownership of Spinumviva, whose annual revenue peaked at 415,000 euros ($431,558) in 2022, to his wife and sons.
The opposition said that since Montenegro is married and assets acquired after marriage, under Portuguese law, belong to the couple, the transfer of ownership to his wife is invalid.
Nuno Santos has accused Montenegro of receiving payments from companies while he was prime minister for several months.
Montenegro denied any wrongdoing or ethical shortcoming and said his income and all assets were included in the declarations he submitted when he became premier.
(Reporting by Sergio Goncalves and Andrei Khalip; editing by Andrei Khalip, Gareth Jones and Richard Chang)
