Socialist Party abstention clears budget path

The Portuguese Socialist Party will allow the passage of the 2027 State Budget (OE2027) following policy commitments made by Prime Minister Luís Montenegro. Socialist Party Secretary-General José Luís Carneiro announced on 30 September 2026, in an interview with the newspaper ECO, that he will propose a formal abstention to the party leadership bodies. The decision follows government concessions across four negotiating conditions presented by the opposition party, which included safeguarding social security funding and securing explicit commitments from the executive not to reduce present or future pensions.

“We opted for abstention because the prime minister gave a very positive sign by responding to all the questions we had raised.”

Government terms on constitutional reform

The shift in the Socialist Party position came after Montenegro addressed the PSD National Council on the night of Tuesday, 29 September. The prime minister confirmed that the socialists would not be excluded from upcoming negotiations on amending the Portuguese Constitution. Montenegro announced the formation of an internal working group led by Paulo Mota Pinto, a constitutional law professor, former Constitutional Court judge, and former parliamentary leader under Rui Rio. The working group received a three-month deadline to draft the PSD constitutional project. Montenegro stated that the executive has no policy agreement with the Chega party regarding constitutional content, confirming only an understanding on the calendar to begin proceedings in 2027.

“There is no need to expect any constitutional revolution. We are not going to exclude anyone. We will remain faithful to the material limits of the constitutional revision.”

Inter-party friction and legislative thresholds

During his party address, Montenegro defended his stance by recalling the 2015 political alliance, known as the geringonça, which barred Pedro Passos Coelho's re-elected coalition from governing. He told socialist leaders not to claim moral authority over constitutional conventions while emphasizing that a two-thirds parliamentary majority requires cross-party cooperation. Earlier efforts by PSD vice president and spokesperson Sebastião Bugalho to tie the constitutional revision to socialist support for two consecutive budgets over a ten-month process were rejected by the opposition. The Socialist Party confirmed it will finalize its official vote after the executive formally submits the fiscal proposal to the Assembly of the Republic.

Cabinet response and fiscal limits

Minister of State and Finance Joaquim Miranda Sarmento welcomed the socialist decision on Wednesday afternoon following rounds of budget talks in parliament with all represented parties. Sarmento stated that the abstention provides political stability while operating within a narrow fiscal margin. Montenegro also reminded party delegates of past troika-era austerity, emphasizing that the government aims to address cost-of-living increases without exceeding fiscal limits. He noted that recent public accounts recorded surpluses without relying on budgetary freezes, while warning lawmakers that the specialized committee stage in parliament must improve the bill rather than replace it.

“The PS decision is a very positive decision for the country because it allows political stability, but that does not prevent us from listening to and examining all proposals within the relatively small budgetary margin.”