Portuguese Finance Minister, Fernando Medina, has expressed his support for Home Affairs Minister, Jose Luis Carneiro, in the race to become the next leader of the country's Socialist Party. This comes after the unexpected resignation of Prime Minister, Antonio Costa, last week. Medina cited Carneiro's vision of continuity with the current government's policies, particularly in the area of debt reduction.
Currently, there are two candidates vying to succeed Costa as Socialist leader: Carneiro and former infrastructure minister, Pedro Nuno Santos. Carneiro is viewed as more moderate compared to Santos, who is often associated with the left wing of the party.
Costa, who has served as prime minister since 2015, surprised the nation by resigning on November 7th amidst an investigation into possible influence peddling within the government. President Marcelo Rebelo de Sousa then called for an early election on March 10th, stating that Costa's resignation will officially take effect in early December to allow lawmakers to approve the outgoing government's 2024 budget. Costa, who will not be running again, had previously secured re-election in January 2022 with an absolute majority in parliament.
The proposed 2024 budget focuses on income tax cuts and aims for a surplus of 0.2% of gross domestic product, slightly smaller than the projected surplus for 2023. Although the country's economy is expected to experience a slowdown this year following the rebound from the pandemic, the government plans to continue reducing the national debt burden.
In 2022, Portugal had the third-highest debt ratio in the euro area. However, according to the European Commission's projections earlier this week, it is anticipated to drop to sixth place in 2023 as the country's debt-to-GDP ratio falls below the levels of France, Spain, and Belgium. The efforts to lower the debt burden are seen as crucial for maintaining financial stability and promoting economic growth in Portugal.
As the campaign for the next Socialist Party leader intensifies, the support of high-profile figures such as Fernando Medina carries significant weight. Carneiro's emphasis on continuity aligns with the party's current government policies, which could attract support from those seeking stability and incremental progress. Ultimately, the upcoming election will shape the future trajectory of Portugal's political landscape and determine the country's leadership during delicate economic times.