Portugal is headed for another minority government after general election

The incumbent center-right Democratic Alliance won a general election in Portugal on Sunday, but it failed to secure a majority in Parliament and was set to take office as a minority government for the second time in a year amid a surge in support for a hard-right populist party.

Portugal’s third general election in three years dashed hopes that the ballot could end the worst spell of political instability for decades in the European Union country of 10.6 million people.

Also, an increasing wave of support for Chega (Enough), a populist party which may yet claim second place with its focus on curbing immigration and cracking down on corruption, added further uncertainty to Portugal’s political climate.

With 99.2% of votes counted, the Democratic Alliance captured at least 89 seats in the 230-seat National Assembly, Portugal’s Parliament. It had been in power for less than a year when it was ousted in a confidence vote in March. It collected 80 seats in last year’s election and served as a minority government.

Democratic Alliance leader Luis Montenegro, the incumbent prime minister, indicated he would be open to political deals with opposition parties.

“We all have to be able to speak to each other and put the national interest first,” he said in a post-election speech to supporters.

Seven smaller parties also won seats.

Without a majority of seats the Democratic Alliance, led by the Social Democratic Party, can try to recruit support from smaller parties, currently seen as unlikely, or take office as a minority government as it did during its last term. That leaves it at the mercy of opposition parties combining to bring it down, as happened two months ago.

Public frustration with Portugal’s main parties has brought an increasingly fragmented political landscape and defied efforts to unite behind policies on pressing national issues such as immigration, housing and the cost of living.

In a dramatic demonstration of the changing complexion of Portuguese politics, support for the populist party Chega surged once again. It collected at least 58 seats, up from 50 seats last year, and is challenging the center-left Socialists as Portugal’s second-biggest party.

Chega competed in its first election just six years ago, when it won one seat, and has fed off disaffection with the more moderate traditional parties. Campaigning under the slogan “Save Portugal,” it describes itself as a nationalist party and has drawn on the popularity of its leader, lawyer and former soccer pundit Andre Ventura.

“This is my moment,” Ventura said. “It’s a great victory for Chega.”

He opened the door to an understanding with the Democratic Alliance, saying the country needs stability.

For the past 50 years, the Social Democrats and the Socialist Party have alternated in power.

The Socialists were contemplating possibly their worst result since 1987, also gaining 58 seats.

Socialist leader Pedro Nuno Santos announced he was standing down, saying: “These are tough, difficult times for the Socialist Party.”

The center-right alliance led opinion polls

The Democratic Alliance, which also includes the smaller Popular Party, lost a confidence vote in parliament in March after less than a year in power, as opposition lawmakers teamed up against it. That triggered an early election, which had been due in 2028.

The confidence vote was sparked by a political storm around potential conflicts of interest in the business dealings of Social Democratic Prime Minister Luís Montenegro’s family law firm. Montenegro has denied any wrongdoing and is standing for reelection.

Corruption scandals have dogged Portuguese politics in recent years. That has helped fuel the rise of Chega, whose leader Ventura says he has “zero tolerance” for misconduct in office.

But Chega has recently fallen foul of its own lawmakers’ alleged wrongdoing.

One is suspected of stealing suitcases from the Lisbon airport and selling the contents online, and another allegedly faked the signature of a dead woman. Both resigned.

Immigration and housing are key issues

Chega owes much of its success to its demands for a tighter immigration policy that have resonated with voters.

Portugal has witnessed a steep rise in immigration. In 2018, there were fewer than a half-million legal immigrants in the country, according to government statistics. By early this year, there were more than 1.5 million, many of them Brazilians and Asians working in tourism and farming.

Thousands more lack the proper documents to be in Portugal. The outgoing government announced two weeks before the election that it was expelling about 18,000 foreigners living in the country without authorization. Though such a step is routine, the timing drew accusations that it was trying to capture votes from Chega.

Socialist leader Pedro Nuno Santos, who is also standing for prime minister, described the move as a “Trumpification” of Portuguese politics, referring to U.S. President Donald Trump’s focus on immigration policies.

A housing crisis has also fired up debate. House prices and rents have been soaring for the past 10 years, due in part to an influx of white-collar foreigners who have driven up prices.

House prices jumped another 9% last year, said the National Statistics Institute, a government body. Rents in and around the capital Lisbon, where around 1.5 million people live, last year saw the steepest rise in 30 years, climbing more than 7%, the institute said.

The problem is compounded by Portugal being one of Western Europe’s poorest countries.

The average monthly salary last year was around 1,200 euros ($1,340) before tax, according to the statistics agency. The government-set minimum wage this year is 870 euros ($974) a month before tax.

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A previous version of this story was corrected to show that 116, not 166, seats are needed for a majority in Parliament.