Portugal's Socialists and far-right team up again to block government, budget doubts mount

The government of Portugal, which leans towards the right side of the political spectrum but does not have a majority, faced a new problem on Wednesday when the far-right party Chega worked with the Socialists to prevent a decrease in income tax for middle-class citizens. This decision raises questions about whether the budget for the year 2025 will be approved.

The government's suggestion to lessen taxes, which could have helped workers earning up to roughly 5,800 euros ($6,300) per month, was not approved in parliament due to the opposition of all left-wing political parties. Chega decided to withhold their vote.

However, the elected officials approved the alternative proposition put forward by the Socialist party, which restricted the reduction to the economically disadvantaged population earning a maximum gross salary of 2,850 euros. The far-right party's decision to abstain also played a part in this outcome.

According to the parliamentary leader of the ruling Social Democrats, Hugo Soares, Chega is a partner of the Socialist Party in obstructing the government and opposing the middle class.

Pedro Nuno Santos, who is a Socialist leader, asserted that his party's proposition is more equitable for the society compared to that of the government. He further suggested that the government should communicate with other political parties to come to a conclusion.

Rui Afonso, a Chega legislator, stated that the proposal put forth by the Socialists was more beneficial as it specifically focused on employees with lower incomes.

Portugal is considered to be one of the most deprived countries in Western Europe. The minimum wage that is assigned by the government for the laborers is only 820 euros on a monthly basis.

The AD coalition, which is conservative, won the general election in March but only by a small difference against the Socialists. They now require the support of either the Chega party, which has managed to increase their seats fourfold, or the Socialists in order to pass any new laws. This is due to the fact that the parliament is now more divided than it has been in half a century.

The latest defeat in parliament is not unprecedented for the recently elected government. In the previous month, the Chega party joined forces with the Socialists to stop people from paying tolls on eight different highways. Though this decision was meant to decrease the financial burden on travelers, it ultimately led to greater public spending, which was a source of concern.

Antonio Costa Pinto, an expert in politics, made a statement to the broadcaster RTP, stating that the stability of the government in Portugal highly depends on the state budget.

It is anticipated that the ultimate decision regarding next year's budget will take place before November concludes.

The exchange rate for dollars to euros is currently 0.9193.

Written by Patrícia Vicente Rua with the collaboration of Sergio Gonçalves. Edited by David Latona and Toby Chopra.