According to a recent exclusive report from Correio da Manhã, Portugal may have to organize early elections if the 2025 State Budget fails to pass parliament. President Marcelo Rebelo de Sousa has indicated an important shift in position since he had earlier stated more confidence in his chances of avoiding such a situation.

But it seems that his concerns about the country’s political stalemate and economic stability have led him to take a more assertive stance.

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Marcelo Concerned Over Political Deadlock

The report states that Marcelo is becoming more concerned about the possible fallout from this, according to sources at the president’s official Belém house. The drop in Portugal’s investment grade by international rating agencies may have an impact on its borrowing capacity if the budget is not approved.

Furthermore, there is a chance that the essential EU funding associated with the Post-Pandemic Recovery Plan (PRR) could be further delayed.

These concerns are particularly important because of the growing volatility of the world, upcoming elections in the United States, and current conflicts throughout the world. Marcelo believes that Portugal is unable to afford any political games because of the risks that are involved.

If the three biggest political parties, the right-wing CHEGA, the AD government, and the PS Socialists cannot agree on the budget then nation may face a third round of elections for parliament in just three years

Economic Consequences

Marcelo’s attitude has changed because of two failed attempts by the government to come to a budget settlement with opposition parties. Taxes have been the most difficult factor. The PS Socialists oppose the AD government’s plans to reduce the tax burden on companies and young people. 

On SIC’s Jornal de Noite, political analyst Luís Marques Mendes recently expressed his dissatisfaction with the current state of affairs. He considers the possibility of three separate elections in 2025 as “completely ridiculous.”

He made the argument that conducting presidential, local, and parliamentary elections all in the same year would overload both people and politicians in the whole country.

Mendes said:

It’s exactly what the country doesn’t need right now

Marcelo’s Calls For Political Cooperation

President Marcelo seems to be operating as the voice of reason in the middle of this political crisis. He is asking the parties to set aside their differences and focus on what’s important: the well-being of the entire country.

Eduardo Dâmaso, the deputy director general of Correio da Manhã, states that Marcelo’s frustration is obvious.

Dâmaso stated by describing the political talks as closer to a boxing match of egos:

The discussion over the State Budget has not been serious. It has transformed into a boxing match of egos served by a myriad of megaphones (…) In the middle of the cacophony, Marcelo has chosen the path of good sense. He is asking that (politicians) look at the country rather than the catastrophic, narcissistic thesis of the social democrats, Socialists and CHEGA.

He also said:

At a point where the world wobbles in Ukraine, America and the Middle East, there is nothing else to say (…) Delay in the execution of the PRR is not an option. The message from Marcelo to (political leaders) could not be clearer: stop playing games and come to an agreement. Do what you like with your electoral shopping list but think of the country

Here, Marcelo is taking a chance. He is placing his bets on the major political groups being forced to work together and come to their senses by the possibility of early elections. If they fail to do so, Portugal may face a long time of political instability, many election campaigns in 2025, and an economy that struggles to recover in the face of worldwide issues.