Latest news and stories about economic activity in government in Portugal for expats and residents.
Prime Minister Luís Montenegro faces a heated parliamentary debate as opposition parties criticize the government's response to rising fuel prices triggered by the conflict in Iran.
The Bank of Portugal (Banco de Portugal) has authorized a monthly gross pension of approximately €10,000 for its former governor, Mário Centeno. The 59-year-old former Finance Minister reached an agreement to retire after a career that included a decade at the central bank. While the bank maintains the specific terms of the agreement are confidential, the move has sparked public debate regarding retirement ages and public sector benefits.
Mário Centeno is a Portuguese economist and politician who served as Finance Minister from 2015 to 2020 and as President of the Eurogroup from 2018 to 2020, and later became Governor of the Bank of Portugal (Banco de Portugal). His nomination for vice‑president of the European Central Bank matters because a senior Portuguese official at the ECB could influence euro‑area monetary policy decisions that affect interest rates and the economy in Portugal.
The government and social partners reported progress in negotiations over a new labour package, though a final agreement has not yet been reached. The Business Confederation of Portugal (Confederação Empresarial de Portugal or CIP) and the General Workers' Union (União Geral de Trabalhadores or UGT) noted increased flexibility, while the General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses or CGTP) protested after being excluded from the meeting. Employers are pushing for measures to increase productivity, while the government warns that “nothing is agreed until everything is agreed.” Workers and business owners should monitor these negotiations for changes to overtime pay and contract rules.
CIP is the Confederation of Portuguese Business (Confederação Empresarial de Portugal), the main employers’ association that represents companies and sector groups in Portugal. It lobbies government on economic and labour policy and its statements are watched by investors, employers and workers when debates arise over funding rules and labour reforms.
The General Union of Workers (UGT – União Geral de Trabalhadores) is one of Portugal’s two main national trade union confederations. Founded in Lisbon on 28 October 1978, it was created as a social‑democratic alternative to the more communist‑aligned CGTP after the 1974 Revolution, grouping unions close to the Socialist Party and moderate centre‑right currents.
UGT represents around 400,000 workers and is affiliated to the European Trade Union Confederation and International Trade Union Confederation, giving Portuguese labour a voice at EU and global level. Its principles stress union independence from the state, employers, churches and parties, internal democracy and active worker participation.
Historically, UGT’s hallmark has been “propositive” social dialogue: it is usually more willing than CGTP to sign tripartite agreements on wages, labour law and social policy with governments and employers, shaping minimum wage increases, working‑time rules and social protection reforms. This makes UGT a key centrist actor in Portugal’s industrial relations, often mediating between left and right while defending collective bargaining and incremental improvements to labour rights.
The CGTP study is a report published by the General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses), Portugal's largest trade-union centre. Such studies typically analyse pay, working conditions and public-sector cuts and are used by unions to justify strike actions and policy demands.
This edition of Contraponto examines the ongoing negotiations surrounding the government's labour package and analyzes the impact of the Middle East conflict on European energy prices.
The Portuguese Communist Party (Partido Comunista Português or PCP) and the Left Bloc (Bloco de Esquerda or BE) are calling for government regulation and price fixing for fuel and food. Leaders Paulo Raimundo and José Manuel Pureza criticized the “obscene profits” of large companies during a protest in Lisbon, citing speculation linked to Middle East tensions. Consumers should note that these parties are also pushing for an extraordinary tax on large corporate profits.
The Portuguese Communist Party (PCP or Partido Comunista Português) is a Marxist‑Leninist party founded in 1921 out of the revolutionary trade‑union and anarcho‑syndicalist movement, becoming the Portuguese section of the Comintern in 1923. Banned after the 1926 coup, it went underground and became a central force of resistance to the Estado Novo dictatorship, organizing clandestine unions, anti‑fascist struggle and supporting the colonial liberation movements. After the 1974 Carnation Revolution, the PCP was pivotal in land reform, nationalisations and embedding social rights in the 1976 Constitution, especially in the Alentejo and Setúbal regions where it has long been very strong.
Today the PCP is a smaller but still influential party rooted in the CGTP trade‑union confederation and local government, holding a handful of Assembly seats and one MEP in the Left group. It advocates a “patriotic and left‑wing alternative”: defence of workers’ rights, public services and national sovereignty, strong criticism of EU and NATO constraints, and support for socialist countries and anti‑imperialist causes.
José Manuel Pureza is the national coordinator of the Left Bloc (Bloco de Esquerda), the party quoted in the story. In the article he is cited criticizing the president’s stance on the labour package, so his comments reflect the party’s public position on that policy.
PCP Secretary-General Paulo Raimundo has challenged Prime Minister Montenegro to tax the record profits of major banking and energy corporations to fund war-related costs, urging a direct confrontation with big capital.
Former Minister of Economy Manuel Caldeira Cabral examines how Middle East geopolitical instability and rising oil prices could impact the Portuguese economy and household costs.
Prime Minister Luís Montenegro has promised to use regulatory power to prevent fuel price speculation as costs at some stations again exceed two euros per liter. Energy Minister Maria da Graça Carvalho stated that while the market is tense, Portugal has not yet reached an 'energy emergency' that would trigger more drastic measures. Drivers should note that the government plans to release 10% of strategic oil reserves to help stabilize the market, though taxi federations are already requesting extraordinary support.
Luís Filipe Montenegro Cardoso de Morais Esteves (born February 16, 1973, in Porto) is a Portuguese lawyer and center‑right politician who has served as Prime Minister of Portugal since April 2, 2024. A long‑time member of the Social Democratic Party (PSD), he is the leading figure of the post‑Troika generation of Portuguese conservatives. Montenegro was elected to the Assembly of the Republic in 2002 for the Aveiro district and remained an MP for 16 years, becoming PSD parliamentary leader from 2011 to 2017 during the bailout and austerity period under Prime Minister Pedro Passos Coelho. He was a prominent defender of strict austerity measures, arguing in 2014 that “the life of the people is no better, but the life of the country is a lot better,” a phrase that has followed his public image since. After an unsuccessful leadership bid against Rui Rio in 2020, Montenegro won the PSD leadership in 2022. He then forged the centre‑right Democratic Alliance (PSD–CDS‑PP and allies), which won a plurality of seats in the 2024 legislative election. Refusing to partner with the far‑right Chega, which he has called “often xenophobic, racist, populist and excessively demagogic,” he formed a minority government as head of the XXIV Constitutional Government on April 2, 2024. His first government fell in March 2025 after a no‑confidence vote linked to a conflict‑of‑interest affair, but fresh elections saw the Democratic Alliance increase its seat share, allowing Montenegro to return as prime minister leading the XXV Constitutional Government. His importance to Portugal lies in attempting to re‑center the traditional centre‑right after the crisis years, defending liberal‑conservative economics and EU alignment while drawing a sharp line against formal cooperation with the radical right, thus shaping how Portuguese democracy manages its new multi‑party era.
Maria da Graça Carvalho, the Energy Minister, is a Portuguese engineer and politician affiliated with the Social Democratic Party (PSD) who has served as a Member of the European Parliament and held government roles connected to science and higher education policy. Her work on research and EU policy can affect funding and regulation that matter to professionals and students living in Portugal.
Former CDS leader Paulo Portas addressed a PSD conference, emphasizing the necessity of long-term policy consistency and national stability to navigate an increasingly dangerous global landscape, while highlighting productivity as the key to wage growth.
A total of 11,000 companies have applied for exemption from the Single Social Tax (TSU), amounting to an estimated 200 million euros in total.
The Institute of Employment and Professional Training (IEFP) has approved 390 applications for an extraordinary fund aimed at job maintenance, totaling over 11 million euros. This fund was established in response to the severe impact of bad weather, particularly from storms Kristin, Leonardo, and Marta, which have caused significant destruction and loss of life in Portugal. The approved applications will support 3,840 workers, with the majority coming from the Central region, which was the hardest hit. The manufacturing and retail sectors are the primary beneficiaries of this financial aid.
Portugal and Spain are forging an alliance to address climate change and enhance economic cooperation. At a recent summit, they focused on eliminating barriers for cross-border businesses while prioritizing sustainability initiatives.
Tourism is a vital part of the Portuguese economy, but it must adapt to new challenges such as increasing value, diversifying markets, and managing visitor flows effectively. Lídia Monteiro from Turismo de Portugal emphasizes the need for strategic growth in a competitive global landscape.
The European Budgetary Council has suggested that Portugal should diverge from the European Commission's recommended spending path, indicating a potential need for a revised budget. The anticipated safety margin in the approved budgets could be around 2 billion euros, which has previously allowed governments to avoid budget revisions. Additionally, the Ministry of Finance is tightening budgetary controls for the 2027 State Budget, requiring public entities to prepare for expenditure reservations that could reach 7.5% of tax-funded spending, marking a significant increase in fiscal oversight.
The article discusses the detrimental impact of bureaucratic delays and obstacles on economic activity, highlighting findings from a recent INE survey. It identifies the judicial system, licensing, and taxation as the primary barriers to business development, exacerbated by ineffective public policies. The author calls for legislative reforms to address these issues, particularly in the judicial and licensing sectors, to facilitate investment and growth in the economy.
The Secretary of State for the Budget has acknowledged that the budget margin for 2026 is likely to be fully utilized to provide support for regions impacted by recent storms. Despite this necessity, he emphasized the importance of maintaining a balanced budget moving forward. The anticipated demands for financial assistance will overshadow any potential surplus that could arise from tax and contribution revenues by the end of 2025.
Update: Budget margin to be consumed by support demands
The Secretary of State for the Budget stated today that the budget margin for 2026 “will tend to be consumed by the demands associated with support for the victims of the storms.” He acknowledged that while there may be a potential surplus from tax revenues by the end of 2025, the primary focus will remain on addressing the urgent needs of storm-affected regions.
The PCP emphasizes the need for the government to advance with the simplified 100% 'lay-off' scheme, asserting that the current issues can be resolved easily. Paulo Raimundo highlights the urgency for the government to address ongoing problems, particularly in the aftermath of Storm Kristin.
The president of CIP, Armindo Monteiro, asserts that while policies are beginning to shift away from the traditional 'hand-out model' of European funding, the presence of unions complicates the implementation of these changes. He criticizes unions for focusing primarily on reducing working hours and increasing holidays, which he believes hinders the potential for economic growth and improvement in living standards in Portugal.
Paulo Fernandes, the president of the mission structure 'Rebuild the Central Region', expresses concern that over half of the local companies may have suffered damage due to severe weather conditions. He emphasizes the necessity of providing support to families who have lost their homes as a critical response to the crisis.
The article discusses the urgent need for Portugal to create conditions that allow its citizens, especially the youth, to live fulfilling lives. It highlights the challenges of job instability, low wages, and high housing costs that hinder family planning and personal growth. The piece argues that economic growth should not only be measured by GDP but also by the quality of life and the ability to retain talent. It calls for policies that promote better salaries, housing access, and support for families, emphasizing that the Portuguese dream is collective and rooted in the belief that each generation can live better than the last.
The government has received approval from Brussels to classify expenses incurred during storms and floods as 'one-off' costs, which will not affect the net primary expenditure. This decision, explained by Miranda Sarmento, allows for greater budget flexibility in managing unforeseen natural disasters.
In his analysis, Carlos Rodrigues argues that the public's fatigue is not with the electoral process itself, but rather with the persistent issues that remain unresolved despite repeated elections. He emphasizes the need for effective policies that address the economic and social challenges faced by citizens, suggesting that voters are seeking real solutions rather than just political rhetoric.
Portugal aspires to be a leader in innovation and technology, focusing on integrating AI in education and attracting foreign investment. However, the reality of its public services is starkly contrasting, with inefficiencies so severe that even basic tasks like paying taxes require prior appointments, highlighting a systemic failure that undermines its ambitions.
President Marcelo Rebelo de Sousa has proposed discussions on establishing a disaster fund in Portugal to address damages from increasing natural disasters, such as recent floods. During a visit to the flooded area of Alcácer do Sal, he highlighted the need for financial relief for businesses affected by such calamities, especially those without insurance. He noted that similar funds exist in the European Union and emphasized the opportunity presented by the Recovery and Resilience Plan (PRR) to support this initiative.
Following severe weather conditions in Portugal, over 100,000 insurance claims have been submitted, with 75% already assessed. Insurers have processed only 12,000 claims so far, as many are hindered by access issues. The government has extended the state of calamity in affected areas and pledged significant financial support.
I express solidarity with families and businesses hit by the recent storm and analyse the economic fallout: production disruptions, supply problems, material losses and sharp revenue declines compounding an already fragile economic context. The initially approved support of about €2.5bn is inadequate; the government’s move to roughly €4bn reflects the scale of social and economic damage and the need for swift, streamlined, locally tailored aid. While budgetary discipline underpins external credibility and macroeconomic stability, excessive restraint now risks irreversible loss of productive capacity, exports and skilled jobs. Support should be treated as strategic investment in Portugal’s resilience, alongside longer‑term spending on resilient infrastructure, risk management and climate adaptation policies.
The Order of Certified Accountants (OCC) is set to release a template to help entrepreneurs affected by severe weather document damages to their properties. This template will assist in substantiating requests for financial support, as announced by OCC president Paula Franco.
