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Portugal’s centre-right government collapsed late on Tuesday as Prime Minister Luís Montenegro lost a confidence vote triggered by a scandal over his family business.
His defeat will lead to Portugal’s third election in less than four years as the country faces pressure to boost defence spending and is roiled by a rise in anti-immigrant sentiment that has energised the far-right.
Montenegro, who led a fragile minority government for 11 months, has been engulfed in a storm over his alleged failure to divest his stake in a legal consultancy he founded.
His government fell after the opposition Socialists, other left-wingers and the far-right Chega party voted against the premier in a confidence motion in parliament, which he himself called last week.
“We’ve tried everything,” Montenegro said. “Even though the country does not understand why we are heading to elections [in May] in the midst of a very difficult international context, I believe it is better to have a clear resolution in the next two months rather than a year of constant instability.”
The saga has reinforced public perceptions of widespread corruption in Portuguese politics, where previous premiers faced accusations of graft.
Montenegro plans to stand in the new elections and insists he has done nothing wrong.
The ousted prime minister, head of the Democratic Alliance coalition, set up a firm called Spinumviva in 2021 when he was out of politics. But he was put on the defensive by revelations that he had transferred ownership of it to his wife and sons in 2022 — a move critics said was invalid because, under Portuguese law, he and his wife opted to be common owners of all assets acquired after they wed.
Socialist opposition leader Pedro Nuno Santos has accused Montenegro of “receiving payments from companies” while prime minister because Spinumviva’s clients continued to pay the consultancy.
When the Socialists threatened to set up a parliamentary inquiry into the affair last week, Montenegro said “the country needs political clarification” and announced he would submit his government to a confidence vote.
But his premiership ended after several hours of confusion in which he appeared to have second thoughts on the confidence vote and tried to avert it by offering the Socialists a time-limited parliamentary inquiry.
Marina Costa Lobo, director of Lisbon’s Institute of Social Sciences, said: “Montenegro used the debate to victimise himself and to place the whole responsibility on the Socialists. The refusal by the Socialists to accept a last minute deal will have some electoral risks. But Montenegro’s chances will also depend on any more news on the prime minister’s side regarding his income sources.”
Santos, the Socialist leader, said: “What happened today in parliament was a disgrace. It was all about games and manoeuvres.”
Paula Espírito Santo, a political-science professor at the University of Lisbon, said Montenegro had handled things badly by not selling or closing down the consultancy when he became party leader in 2022.
In recent weeks, she said: “He had the option of trying to clarify everything, but he did not and it has snowballed . . . He has not been ahead of events. He is reacting to events.”
Last week, Montenegro’s wife transferred her shares in the company to the couple’s adult children.
The latest poll on Tuesday showed the Socialist party leaping ahead of AD since late last week. The Socialists had 30.8 per cent of the vote versus AD on 25.8 per cent, according to the Aximage poll for Diário de Notícias.
A new government will face immediate pressure to boost defence spending as US President Donald Trump rails against Nato members not paying their fair share. Portugal spent about 1.6 per cent of GDP on defence last year, short of Nato’s 2 per cent target that is set to be raised. Trump has said he wants to raise the target to 5 per cent.
The AD’s struggle to attain a parliamentary majority has been due in large part to the rise of Chega, a far-right party capitalising on discontent over immigration and corruption.
Montenegro ruled out working with Chega while in office and his lack of a majority meant he was unable to implement significant reforms. He passed some tax cuts with the support of the Socialists and had a 2025 budget approved because the Socialists abstained.
Portugal’s previous prime minister António Costa, now president of the EU Council, resigned in 2023 over a lobbying scandal that is still being probed by prosecutors, although he has not been accused of misconduct. José Sócrates, premier from 2005-2011, is awaiting trial on charges of money laundering and falsifying documents. Both men deny wrongdoing.
This story has been amended to clarify that Montenegro and his wife chose to jointly own their assets.
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