44 Portugal

Politico

Portuguese Prime Minister António Costa submitted his resignation Tuesday after police raided his official residence and the country’s attorney general confirmed he was being investigated under a corruption probe.

The prime minister’s resignation came hours after Portugal’s national police carried out searches of Costa’s residence and several government ministry buildings. The sweeps are part of a corruption probe linked to lithium exploration schemes in the north of the country as well as a green hydrogen mega-project in Sines.

Costa’s socialist government has enthusiastically backed schemes to extract lithium in different areas of Portugal as part of the EU’s wider drive to secure critical raw materials, but those projects have been mired in controversy due to the low quality of the material to be extracted and the disproportionate environmental damage expected.

A 2021 POLITICO investigation into one mining scheme in the northern Montealegre region highlighted these controversies and ultimately led the Portuguese government to cancel a major project in the area.

The prime minister’s executive had also bet big on a green hydrogen production hub in the Port of Sines, a project that is being funded with millions of euros in EU innovation cash.

End of an era

Socialist Party leader Costa became prime minister of Portugal in 2015, forming a minority government backed by an unlikely coalition of far-left parties.

His government oversaw a tourism boom that turned the country into an international hotspot and led observers to salute a “Portuguese economic miracle” that had transformed the country after years of austerity imposed following the European debt crisis.

The impact of COVID on tourism, however, dampened enthusiasm for Costa and invited censure of his government’s promotion of cheap service-sector jobs and tax breaks for digital nomads. Left-wing parties also broke with the PM due to meager public investment in education and health care, as well as for his government’s inaction during a nationwide housing crisis worsened by an influx of expat residents.

However, despite widespread discontent among public sector workers, Costa’s Socialist Party managed to gain an absolute majority of seats in the country’s parliament in 2022 legislative elections thanks to a campaign in which Costa cast himself as the only viable alternative to a center-right government supported by the far-right Chega party.