Portugal's New Government Navigates Political Challenges

Portugal's minority centre-right government has assumed power after overcoming an opposition motion in parliament. Despite lacking a parliamentary majority, Prime Minister Luis Montenegro's Democratic Alliance coalition seeks to maintain stability, cut taxes, and engage with the opposition. The government's first critical test will be the 2026 budget passage.

In Portugal, a centre-right minority government led by Prime Minister Luis Montenegro formally assumed power after successfully overcoming an opposition attempt to block its administration programme.

The government's agenda includes tax reductions for the middle class and companies, as well as maintaining budget surpluses. The new administration pledges to maintain dialogue with opposition parties on crucial issues such as immigration, despite criticism from the opposition Communist Party which accused the government of prioritizing policies against workers' interests and criticized defense spending plans.

While the small Communist Party opposed the government's programme, larger opposition forces including the Socialists and the far-right Chega voted against the motion, allowing the Democratic Alliance coalition to take office. Montenegro emphasizes the importance of political stability, aiming to secure a firm legislative footprint over the next four years with the looming task of passing the 2026 budget.

(With inputs from agencies.)