Portuguese Prime Minister says available for further budget discussions with opposition

(Bloomberg) — Portuguese Prime Minister Luis Montenegro said he was available to continue talks with the Socialist Party over the 2025 budget after his minority government offered concessions to try to win parliamentary support from the largest opposition group .

“My conviction is that the reflection that the socialist general secretary told me to do can and must lead to the decision of the Socialist Party to let the budget pass,” Montenegro said Thursday evening in Lisbon after meeting the head of the opposition Pedro Nuno Santos.

The budget, due to be presented by October 10, is a key test for the minority administration of the prime minister, who took office in April after the center-right AD coalition’s narrow election victory against the Socialists . Montenegrin’s prime minister must find support from other parties to win approval for budgets and other measures, and may have to compromise on key policies such as tax cuts to pass legislation.

The socialist leader reaffirmed last week his opposition to the government’s plan to lower corporate taxes as well as a reduction in income tax for young people, which he described as unfair for some. Instead, he proposed more investment in housing, higher pensions and increased tax incentives for corporations.404983218

The prime minister said on Thursday the government was now proposing to cut the corporate tax rate by just 1 percentage point, half of what it had previously planned. It also adopted the socialist model for youth income tax and includes other budget proposals made by the opposition party, he said.

The Socialists have only two fewer seats in Parliament than the AD and can pass the budget in Parliament by abstaining. A first vote on the budget generally takes place at the end of October.

The Montenegrin Prime Minister said that governing next year using the 2024 budget “is not a solution”.

The Prime Minister and the Socialist leader also said they did not want early elections. Portugal has held two snap elections in three years, in January 2022 and March this year.

Minority governments in Portugal tend to be short-lived. In 50 years of democracy, only two have survived a full four-year term.

The Montenegrin prime minister’s government has said it aims to post budget surpluses of around 0.2 to 0.3 percent of gross domestic product over the next four years and forecasts economic growth of around 2 percent in 2024 and 2025.