Portugal general election: Expect no big changes

Portugal has been on steady recovery path since end of 2012. Portugal polls are signalling a technical tie between PS and PSD-CDS on the general election of 4 October. In recent polls (e.g., August 2015, by Eurosongadem), PS obtained 36.3% of the vote intention and the government coalition PSD-CDS, which is running jointly, obtained 34.8%. In third place, the communist party CDE got 10% of the vote intention, in line with its level historically. The radical-left BE obtained 5% of the vote intention. Other parties are unlikely to enter the parliament. 

The latest polls also suggest the most likely outcomes are either a victory for PS or PSD/CDS without an absolute majority. Creating a coalition government post-election with an absolute majority would not be straightforward. The communist party (CDE) or the left bloc (BE), the only two other parties likely to enter the parliament, have signalled in the past that they will not be part of any coalition with either of the two large, more moderate parties. While PS could also get the support of the centre party CDS, which often has played the role of Jr coalition partner, this time it may not be sufficient to deliver an absolute majority. In sum, the October election results could deliver a minority government that has to seek support from members of the opposition to get legislation through the parliament, not least the 2016 budget. 

The lack of an absolute majority is highly unlikely to result in snap elections over the next 12 months. The second and final term of President Cavaco Silva is coming to an end on Q1 2016. This means that, regardless of the outcome of the elections, the president of the republic cannot approve early elections for approximately the next 12 months. Indeed, the president cannot call for snap elections six months before the term expires, nor for the six months following the appointment of a new president, which is expected by February/March 2016.