Portugal faces period of heightened instability

Significance

AD won the March 10 election by a narrow margin, well short of a majority, with the outgoing Socialist Party (PS) a close second and the radical right Chega in third. Together, the three have 90% of parliamentary seats. For Montenegro, partnering with either PS or Chega has weighty drawbacks.

Impacts

• Chega’s gains in the recent election suggests it will perform strongly in June’s EU elections, further boosting the far right.
• Portugal's high debt-to-GDP ratio and EU fiscal constraints will limit the government’s ability to pursue an expansionist fiscal policy.
• Chega’s rise does not strengthen Portugal’s support for Ukraine, with only radical left parties calling for a shift in policy.