Potential Snap Election Unlikely To Oust PM Costa

The rejection of the Portuguese gov'ts budget by the Assembly of the Republic on 27 October could lead to a snap election at the first months of 2022. However, given the robust support for Prime Minister Antonio Costa's centre-left Socialist Party (PS), the most likely outcome at present is that he remains at the head of a minority administration.

• Opinion polling since the previous legislative election in October 2019 has shown very little change for the two major parties: Costa's PS and the centre-right Social Democratic Party (PSD), with the former's support holding steady in the high 30's and the latter in the high 20's.
• The main shift has come among the smaller parties. On the left, support for the populist Left Bloc (BE) and communist/eco-socialist Unitary Democratic Coalition (PCP-PEV) - two parties that previously propped up Costa's minority administration - has fallen. On the right, the conservative CDS-People's Party (CDS-PP) - previously part of governing coalitions - continues its steady decline.
• The party with the most notable increase in support is the right-wing populist Chega (Enough) party, which won just a singe seat in the 2019 election but is now polling in a consistent third/fourth place in opinion polling.
• A small increase in support could see the PS win an overall majority, but if this is not possible then another PS minority gov't remains on the cards. The PSD is unlikely to find enough willing coalition allies to oust the PS and form a majority coalition or even a stable minority gov't.

Source: Euirosondagem, Intercampus, Pitagorica, Aximage, CESOP-UCP, ICS, MNI

• The next steps over the coming days are not set in stone, but given that the Portuguese constitution views the 'rejection of the government's programme' as an implied resignation by the gov't it would seem likely that President Marcelo Rebelo de Sousa will be forced into calling a vote. The authorities will want to avoid the Christmas period, so early 2022 seems the most likely option.
• Until then, the Sousa gov't will likely continue in a caretaker capacity. This will mean no major new legislation being passed, and no approval for new spending measures or deciding on how to distribute any EU Recovery and Resilience Facility funding.