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Portugal’s prime minister resigns over a corruption scandal

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CENTRE-LEFT PARTIES in Europe have had a rough time in recent years, but Portugal has been an exception. António Costa, the Socialist prime minister, has been in power since 2015, first leading a coalition including parties from the far left and later a minority government. Portugal’s economy, among the best-performing in Europe, is expected to finish this year with a reasonably solid 2% growth. In an election in 2022, Mr Costa defied expectations by winning an absolute majority for his party in parliament.

Portugal’s Prime Minister Antonio Costa arrives prior to the start of a European Council meeting at the European headquarters in Brussels, on February 1, 2024. EU leaders are to gather in Brussels on February 1, 2024, for a meeting of the European Council, where they will discuss aid to Ukraine as the war nears its second anniversary. (Photo by Ludovic MARIN / AFP)(AFP)

But on November 7th his good fortune came to an abrupt end. He resigned following a police raid on his residence, part of an investigation into corruption scandals over lithium mines and a green-hydrogen project. Mr Costa’s chief of staff and a close adviser were detained, as was the Socialist mayor of Sines, a port city south of Lisbon, and two executives from a data-centre company. Prosecutors announced that the minister of environment and climate and the minister of infrastructure had been named as defendants, and that Mr Costa, too, is under investigation. The prime minister denied having done anything illegal, and said he had “a clear conscience”.

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The corruption probe is looking into government awards of contracts for two big lithium-mining projects, as Portugal tries to win a place for itself in Europe’s growing battery-manufacturing production chain. The country claims to have western Europe’s largest reserves of lithium ore, and in May its environmental regulator granted approval for a huge open-pit mine in the region of Barroso. Another mine, in the region of Montalegre near the Spanish border, was given the go-ahead in September. Both have faced protests from locals over their environmental effects.

But the corruption investigation by Portugal’s public prosecutor dates back to 2019, when a whistleblower alleged there had been favouritism towards Portuguese firms in awarding a contract to build a green-hydrogen energy plant and an associated data centre in Sines. It has since grown to include the lithium mines. The potential crimes under investigation include “active and passive corruption of office holders” and “political influence-peddling”.

Mr Costa says he will not run for prime minister again, regardless of how the investigation turns out. In principle the Socialists could form a new government under a different leader. But after accepting Mr Costa’s resignation, Marcelo Rebelo de Sousa, Portugal’s president, said he had convened the country’s State Council to begin the process of dissolving parliament. No timetable for new elections has been announced. Mr Rebelo said he will provide more detail in a speech on November 9th.

Under Mr Costa, Portugal had become a European success story. The country’s strong economic growth and booming tourism and tech sectors have turned it from a European backwater into a magnet for investors, and it has won praise for progressive health and social-welfare policies. The corruption scandal is likely to cast a shadow on that legacy (and to end speculation that Mr Costa might become the next president of the European Council when that post opens up next year). Paulo Otero, a law professor at the University of Lisbon, called it the gravest moment of institutional discredit since the country became a democracy in 1976. “What is at stake is not suspicion about former rulers or a former prime minister, but about a prime minister in office,” he told Público, a Portuguese newspaper. Whoever succeeds Mr Costa will face the difficult task of restoring public trust in government.

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