The Portuguese Prime Minister António Costa (Socialist Party) resigned from his office this Tuesday (July 11th). The announcement came in a nationwide statement, hours after a major operation to investigate irregularities at companies related to the energy transition reached the core of his government.
Although he denied “performing any unlawful or offensive act,” Costa stated that his continuation was inconsistent with the position. “The dignity of the office of Prime Minister is not compatible with any suspicion of his good behavior and certainly not with any suspicion of criminal activity.”
At a press conference, Costa explained that the next steps will be announced by President Marcelo Rebelo de Sousa, who has already officially accepted his resignation.
Under Portuguese law, the head of state has the right to call early elections and dissolve parliament in serious cases. Rebelo has scheduled meetings with party leaders and an extraordinary meeting of the State Council and is expected to make a statement to the nation next Thursday (9).
Due to legal deadlines and the break at the end of the year, early elections should not take place until January. However, Costa must remain in office until his successor is elected.
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On Tuesday morning, a team of more than 140 agents, including police officers and State Ministry employees, carried out a series of searches at the suspects’ addresses, including the prime minister’s official residence at the Palácio de São Bento in Lisbon.
The focus of the investigations is on deals related to lithium and socalled green hydrogen, two important building blocks for the European Union’s energy transition projects. The first information about suspected irregularities dates back to 2019.
The investigations into lithium are related to the concession and mining of the ore, which is important for electric car batteries, in the municipality of Montalegre. When it comes to hydrogen, suspicions center on the government’s role in a major project to be carried out in Sines.
Two people very close to the prime minister were arrested in the operation: his chief of staff Vítor Escária and adviser Diogo Lacerda Machado, a personal friend of Costa.
In addition, the socialist Nuno Mascarenhas, president of the Sines City Council (position equivalent to mayor), and two businessmen were also arrested. The port of Sines is the main departure point for Portuguese exports.
The Attorney General’s Office justified the arrests with “risk of escape, continuation of criminal activities, disruption of investigations and disruption of public order and tranquility.” According to the PGR, those arrested are suspected of “misconduct, active and passive corruption of political officials and influence peddling”.
Regarding the situation of the Prime Minister, the Ministry of State clarifies that the name of António Costa was mentioned during the investigation by suspects who, within the framework of the investigation, mentioned “his intervention to declassify proceedings”.
Infrastructure Minister João Galamba, who was the subject of searches at his home, was also officially declared under investigation in the case. Environment Minister Duarte Cordeiro and former portfolio holder João Matos Fernandes are also under investigation.
Socalled green energy is one of the European Union’s bets in the transition to less polluting sources. Portugal has the largest lithium reserves in the European bloc the eighth largest in the world. But ore exploration, which is becoming increasingly valued with the popularization of electric cars, is not consensual in the country. Residents, especially in regions with lithium concentrations, repeatedly warn about the negative ecological and social consequences of mining.
Green hydrogen, designed to replace natural gas and produced with electricity from renewable sources, is another Portuguese bet for the energy transition. Portugal has even joined Spain in an Iberian megaproject to convert its gas pipelines to hydrogen circulation. However, largescale commercial production at competitive prices is still a long way off.
The police operation and Costa’s resignation triggered a political earthquake in the country. Most political parties have already openly spoken out in favor of holding new elections. The largest opposition party, the PSD (centerright), had not commented until the publication of this report. The party’s leadership called an emergency meeting and said it would not make a statement until after the meeting.
The leader of the ultraright Chega party, which has the third largest group of MPs, André Ventura, welcomed the prime minister’s resignation and said that the only solution to the political impasse was the dissolution of parliament. “The elections must be scheduled as soon as possible because any other resolution will delay the political process in the country,” he said. Recent polls on voting intentions show that Chega could benefit from bringing the elections forward.
António Costa has been Prime Minister of Portugal since November 2015, when he managed to come to power thanks to an unprecedented alliance between historically divided leftwing parties. Despite the apparent fragility of the agreement, which is pejoratively described as a contrivance, the group managed to bring the legislative session to a close.
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António Costa was reelected in 2019 and had to face early elections after failing to approve the 2022 state budget and parliament being dissolved by the President of the Republic.
In a surprising result polls on voting intentions suggested a technical tie with the main opposition party the Socialist Party emerged from the polls in January 2022 with an absolute majority in the Assembly of the Republic.
Despite the comfortable situation in the House of Representatives, Costa’s third term was marked by a series of political scandals at the highest levels and a sharp decline in the socialist leader’s popularity.
The current case also brought back memories of corruption linked to the party. José Sócrates, the last member of the party to be prime minister before António Costa, was one of the main targets of the Marquês operation, known as “Lava Jato Lusitana” because it also targeted politicians and businessmen.
Sócrates ruled Portugal between 2005 and 2011, but was only the subject of the investigation after he left office. In November 2014, he was arrested at Lisbon airport after returning from a stay in Paris.
Nine years later, the former prime minister has still not been brought to justice and some of the charges are at risk of being barred. Citing weaknesses in the evidence, the judge in charge of the case ruled in April 2021 that Sócrates would not be charged with corruption, but would still be charged with six other possible crimes: three related to money laundering and three for document forgery involving Payments went for a master’s thesis.
Although he was not convicted, the former prime minister became a toxic figure within the party. In an interview with Folha, Sócrates explained that he was left out by the socialists. “I never asked the PS to defend me, but I never thought that it would be the Socialist Party itself that would attack me,” he said.