Budget or elections: in Portugal, the government of Luis Montenegro, which came to power in March, presented the 2025 finance bill in these terms on Thursday, October 10, before a fragmented Parliament and without any guarantee of its adoption. In Spain, to avoid this dilemma, the government of Pedro Sánchez, for its part, decided to postpone the presentation of the budget sine die. He already governs with the expanded 2023 budget… In both cases, the minority governments in power in the Iberian Peninsula have been working for months to convince the opposition parties to support them, without success, more at odds with political calculations of their potential parliamentary allies than in substantive debates.
Tax cuts, increased spending, investment plan of 700 million euros in housing construction and rehabilitation, elimination of tolls and revaluation of pensions and salaries of civil servants… On Thursday, the Portuguese Minister of Finance, Joaquim Miranda Sarmento ignored the uncertainty and presented his budget project. “I call for the responsibility of the oppositionhe said, addressing the Portuguese Socialist Party (PSP). The government responded to the main demands of the PS. »
To convince them, he revised his copy and took into account the red lines that the PSP has drawn in recent weeks. The Government wanted to reduce corporate tax from 21% to 19%: the draft budget is content with a reduction of one point, to 20%. He had announced a differentiated tax regime for those under 35 years of age in order to stop the emigration bleeding of young Portuguese. He changed it to progressive tax benefits limited to those whose income is less than 28,000 euros per year and spread over ten years, — 100% exemption from income tax in the first year of entry into the labor market to a reduction in the base taxable of 75% for the following four years, 50% in the sixth to ninth year and 25% in the tenth. He also renounced the privatization of the TAP airline and committed to following a policy aimed at a budget surplus, betting on 0.3% in 2025 (after a surplus of 1.2% recorded in 2023 and a 0.4% expected for this year).
For now, the PSP remains insensitive to these calls. If the representatives of the centrist wing, close to former Prime Minister Antonio Costa, are in favor of a constructive abstention, facilitating the approval of the budget in November, the new general secretary of the party, Pedro Nuno Santos, of the centrist LEFT wing, “he prefers to lose the elections”, — the opinion polls, in the event of a repeat election, are not favorable —, instead of “abandon [ses] beliefs”, he insists. This uncertainty fuels the hopes of André Ventura, president of the far-right Chega party, of managing to pressure the government to break the cordon sanitaire established by Montenegro and negotiate a new budget with him.
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