PM António Costa
Photo of António Costa by José Coelho/ Lusa

State of Nation debate to address some of Portugal’s deep-seated problems

Debate comes in year marked by public sector strife

On Thursday, Portugal’s MPs will debate the State of the Nation at the end of a parliamentary year marked by the return of inflation, protests on the streets, in the justice system, in education and in health, writes Lusa.

Seven topics will be analysed, from social protests to the cost of living and inflation, strikes in education, health and justice and the housing crisis.  

Here is a quick round-up:

 Social protests:

Trade unions are threatening no respite in the swathe of protests that have already marked the year, with main demands being an increase in wages and pensions in response to the rising cost of living.

According to official data, strike notices communicated to the ministry of labour increased by almost 150% in the first quarter of the year compared to the same period last year.


Inflation has entered the lexicon of Portuguese families, who have been forced to make cuts in budgets, and also in politics, with the government launching several support measures.

The inflation rate has been slowing down, but prices remain well above those recorded in 2021, leading to its control continuing to emerge as one of the major economic challenges by extending longer than expected. In June, it slowed to 3.4%.

Year-on-year food inflation has been above 10% since April last year, reaching 21.5% in February this year, which led the government to launch the temporary measure of reducing IVA (VAT) to 0% on a basket of foodstuffs. The latest data from Statistics Portugal (INE) shows that year-on-year food inflation slowed to 9.4% in May and to 8.57% in June (as of May, 40% of the products analysed by INE were IVA exempt).

However, in June, it was still food and non-alcoholic beverages and restaurants and hotels that had the largest contribution to the change in the inflation rate, while transport and housing, water, electricity, gas and other fuels had the most negative contributions.

Recovery and Resilience Plan

Payments to beneficiaries of the Recovery and Resilience Plan (RRP) have exceeded €2 billion since June, with execution still “below expectations”. The government set a goal of achieving 32% execution of the RRP this year – a target that, after the plan’s reprogramming request to Brussels, minister of the presidency, Mariana Vieira da Silva, explained would be revised, given the increase in the allocation, which should reach €22 billion, above the initial amount of €16.64 billion.

Although António Costa’s government “guarantees that Portugal is among the states with the highest execution of the RRP” and that the plan will be fully implemented on time, the Public Finance Council has emphasised that execution remains “far below the forecast”, the Bank of Portugal (BdP) has been less than optimistic about targets and Brussels has already warned that deadlines will not be extended.  

 Strikes and ‘postponements in Justice’

Justice has experienced a year marked by successive strikes by judicial staff, which have postponed thousands of proceedings and procedural acts in the courts and services of the Public Prosecutor’s Office, creating a climate of permanent unrest due to the lack of response from the Ministry of Justice.

The government has also been heavily criticised by judges, prosecutors and lawyers for the increased bureaucracy of new regulations on the electronic distribution of cases. It has been attacked by the opposition for the delay in resolving this law and the consequences this had on the lapsing of offences in major cases, such as Operation Marquês, which involves former Prime Minister José Sócrates. The government is also under fire for a perceived lack of commitment to fighting corruption.

Tensions in the judiciary rose even further last week following the operation targeting the PSD and its former president Rui Rio over alleged suspicions of the misuse of parliamentary funds. Social Democrats attacked the “disproportionate” means used; Rio denounced what he termed a political intrusion by the Public Prosecutor’s Office, and the PS has conceded that this is another situation in which a law will need to be changed…

 School strife

In education, the last school year – which was expected to see a return to normality and focus on the recovery of learning after the Covid-19 pandemic – was instead marked by endless teacher strikes and protests, and a lot of missed classes.

Teachers are refusing to give up on what Lusa calls “an old claim” (for the restitution of time ‘frozen’ by previous governments) on which this government has categorically closed the door.

Meanwhile, the sector continues to struggle with a teacher shortage, a problem that will worsen in the coming years because, with an aging profession, the number of teachers retiring is not being offset by the number of younger people entering the profession. 

 SNS health system

Portugal’s State health Service (SNS) already costs around €14 billion every year but continues to face difficulties in retaining doctors and nurses and in responding to the growing number of people waiting for consultations and surgeries.

Despite annual budget reinforcements and increased hospital output, the Public Finance Council has warned that waiting lists for first consultations grew by 11% last year while surgical capacity deteriorated. In addition, hospitals are struggling with a shortage of doctors in specialities, such as obstetrics/gynecology and pediatrics, forcing emergency services and maternity wards to rotate in some regions, leading to various issues and some real dramas.

The lack of specialists is also evident in primary health care, where almost 1.6 million people do not have a family doctor, a figure that has been rising steadily in recent years.

The Ministry of Health has responded with figures for the increase in hospital production, but also with measures for primary health care, such as linking the remuneration of family doctors to performance in Family Health Units.

 Housing crisis

The housing crisis is not new, but it has worsened in the last year, leading the government to adopt a package of measures to respond to the emergency, some of which were strongly contested in parliament and on the streets.

The executive approved support for housing loans and rents, which are already in force. The remaining measures of ‘Mais Habitação’ were debated in parliament, in a long and contested process, by opposition and representatives of the sector, which led thousands of people to the streets in April.

From the forced rental of vacant properties to the suspension of new licences for short-term (AL) rents and the limit on the rise of new rents, there have been many criticisms of the government’s package, with an estimated cost of €900 million, but which is expected to be higher, since rent support will cost €430 million, instead of the €200 million initially estimated.

In other words, there is a lot of material for this debate – and very little that appears to be running smoothly.

Source material; LUSA