Budget or elections: in Portugal, the government of Luis Montenegro, who came to power in March, presented the 2025 finance bill in these terms, Thursday October 10, before a fragmented Parliament and without any guarantee that it would not be adopted . In Spain, to avoid this dilemma, the government of Pedro Sanchez, for its part, decided to postpone the presentation of the budget sine die. He is already governing with the extended budget of 2023… 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 confronted with political calculations of their possible parliamentary allies than in substantive debates.
Tax cuts, increased spending, investment plan of 700 million euros in the construction and rehabilitation of housing, removal of road tolls and increase in pensions and salaries of civil servants… On Thursday, the Portuguese Minister of Finance, Joaquim Miranda Sarmento, ignored the uncertainty and presented his draft budget. “I call on the responsibility of the opposition, he said, in the direction of the Portuguese Socialist Party (PSP). The government responded to the main demands of the PS. »
To convince them, he has in fact revised his copy and taken 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 satisfied with a reduction of one point, to 20%. He had announced a differentiated tax regime for those under 35, in order to slow down the bleeding of emigration of young Portuguese people. He swapped it for 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 the labor market to a reduction in the tax base of 75% for the following four years, of 50% in the sixth to ninth years and of 25% in the tenth. He also renounced the privatization of the airline TAP and committed to pursuing a policy aimed at a budget surplus, banking on 0.3% in 2025 (after 1.2% surplus recorded in 2023 and 0 .4% expected this year).
For now, the PSP remains insensitive to these foot calls. If representatives of the centrist wing, close to former Prime Minister Antonio Costa, are in favor of a constructive abstention, facilitating the passage of the budget in November, the new secretary general of the party, Pedro Nuno Santos, from the centrist wing LEFT, “prefers to lose the elections”, — the opinion polls, in the event of an electoral repeat, are not favorable to him —, rather than “give up [ses] beliefs”, he insists. This uncertainty fuels the hopes of André Ventura, president of the far-right Chega party, of succeeding in putting pressure on the government so that it breaks the sanitary cordon set up by Mr. Montenegro and negotiates a new budget with him.
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