Centre-right Luís Montenegro nominated as Portugal's prime minister

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Luís Montenegro is set to become Portugal’s first centre-right prime minister in more than eight years but will lead a fragile minority government after he shunned a potential far-right partner.

Montenegro, who won an election this month as leader of the Democratic Alliance (AD), was nominated by Portugal’s president in the early hours of Thursday to replace outgoing Socialist leader António Costa, who resigned over a corruption scandal.

But Montenegro’s refusal to strike a governing deal with the far-right Chega party, a rising power that cemented its place as the third force in Portuguese politics, has left the AD far short of a majority in the 230-member parliament, with 80 seats.

Both Chega and the Socialists, the centre-right’s main traditional rival, have said they will not oppose Montenegro taking power but will be ready to oppose his plans. That means Montenegro — who has described Chega as racist and xenophobic — will need to embark on difficult negotiations with other parties to pass any legislation.

André Ventura, the Chega leader who won 50 seats in the election, said this week that if Montenegro’s party did not strike a pact with him it “will be responsible for the instability it generates”.

The AD is more moderate than many of Europe’s mainstream conservative parties, but it has vowed to break with nearly a decade of centre-left rule by cutting taxes and doing more to aid the private sector.

Montenegro, 51, a lawyer from Porto with an everyman persona, became president of the Social Democratic party, the main member of AD, in 2022 after two decades as a member of parliament.

After being nominated by President Marcelo Rebelo de Sousa, Montenegro said he would be in Brussels on Thursday to meet European Commission president Ursula von der Leyen. His government is likely to be sworn in during the first week of April after the new parliament holds its first session next week.

Montenegro’s most crucial test this year is likely to be a vote on the 2025 budget. If he cannot get it passed, his government will be critically weakened. But his rivals may be wary of triggering another election.

Pedro Nuno Santos, who led the Socialists to defeat in the election, has promised to form a “strong opposition” and said it would be “almost impossible” for him to support an AD budget.

But in a fillip for Montenegro, he said the Socialists — who have 78 seats — would back modest amendments to the 2024 budget, which has already been enacted, to grant pay rises to police officers, teachers and health workers.

Montenegro won an election that was marked by voter anger over corruption, low wages and soaring housing costs, as well antipathy towards some immigrants and the political establishment stoked by Chega.

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In the campaign Montenegro said the Socialists had wasted the parliamentary majority they won in 2022 and dismissed the idea that the centre-left party had ended the era of austerity. “Maximum taxes, minimum public services. What could be more austere than this?” Montenegro said.

Shortly before the president’s announcement on Wednesday, Montenegro sought to rebrand his impending minority government, saying the AD had “a relative majority” even if it did not had an absolute one.

Costa, the former prime minister who had been in power since 2015, resigned over a prosecutors’ investigation into allegations of corruption and influence peddling related to big investment projects. He has denied any wrongdoing and has not been formally accused but is still being investigated by prosecutors.

Additional reporting by Sérgio Aníbal in Lisbon and Carmen Muela in Madrid