José Luís Carneiro said on Friday, 23 October, that letting OE2027 pass avoids a political crisis that would deepen household hardship amid cost-of-living pressures.
Joaquim Miranda Sarmento defended a 6.2 billion euro deviation in 2026 spending, citing storms, the war in Iran, aid to Ukraine and an extra pensioner supplement.
Benjamim Pereira's remarks on youth sacrifice were called unfortunate by Carneiro, Pereira himself and minister Miguel Pinto Luz, while the Bloco de Esquerda demanded his immediate exit.
The ANMP unanimously approved a positive opinion on OE2027, but the Municipal Emergency Fund covers only 60% of eligible storm costs, leaving 40% to municipalities.
José Luís Carneiro, secretary-general of the Socialist Party (PS), defended on Friday, 23 October, the party's decision to let the 2027 State Budget (OE2027) pass. Speaking in Ermesinde, in the municipality of Valongo, before a parliamentary clarification session, he rejected the idea that the party had acted in haste. He tied the choice to rising prices for food, fuel, electricity and gas, along with difficulties in housing. He argued that voting against the budget would have created a political crisis that would make people's hardship worse.
“Imagine that I voted against the budget and that this created a political crisis in the country.”
Carneiro also cited wars in Europe and the Middle East and political crises in Spain, France, Germany, the United States and Brazil. He recalled elections in 2022, 2024 and 2025, and said some wanted a crisis already in 2026, when a censure motion was tabled by Chega. The PS, he said, would take its cost-of-living and housing proposals into the specialty phase, with the stated priority of avoiding another consecutive election cycle.
Housing also shaped the debate through a controversy around Benjamim Pereira, president of the Institute of Housing and Urban Rehabilitation (IHRU). Pereira asked whether younger generations would be willing to make the same sacrifices as earlier ones, citing his family's emigration to afford a home. Pereira himself and the minister overseeing the institute, Miguel Pinto Luz, had already called those remarks unfortunate. Carneiro also called them unfortunate, but left any decision on Pereira's position to the prime minister rather than formally demanding his removal. The Left Bloc (Bloco de Esquerda) demanded his immediate exit.
Joaquim Miranda Sarmento spent about six hours before the Budget Committee on Friday, starting at 10:00 and running past 16:00 with a short break. He urged Parliament not to dilute the proposal, warning of a risk of crisis in sovereign debt markets and of geopolitical tensions. He said higher interest rates were a "market risk, not a country risk", and he compared Chega's proposals to "Liz Truss to the tenth power". He also announced a cut in autonomous taxes and moved discussion of the state IRC surcharge (derrama estadual) to 2028.
Sarmento defended a 6.2 billion euro deviation in 2026 spending, the gap between the amount budgeted for that year and the figure shown in the 2027 budget, blaming storms, the war in Iran, aid to Ukraine and an extra supplement for pensioners. Former finance minister Mário Centeno, who had raised the figure repeatedly, was also under scrutiny. The PS deputy António Mendonça Mendes warned the government of the balance the party would protect:
“The State Budget, insofar as it depends on the PS, will come out with exactly the same balance it went in with.”
Mendonça Mendes added that support for families facing the higher cost of living would be handled in the specialty phase and would come out with measures for families.
On Friday, the general council of the National Association of Portuguese Municipalities (ANMP) unanimously approved a globally positive opinion on OE2027, a position its executive council had already endorsed unanimously. Its president, Pedro Pimpão, who is also mayor of Pombal, said:
“This bill is globally positive, since it matches what the Local Finance Law currently stipulates.”
Pimpão described the budget as a transition budget, because the Local Finance Law is under revision, and the association wants "an effective strengthening of financial means for municipalities". Its main concern is the underfunding of education competences transferred to councils, which a study commissioned by the Education Ministry has already identified. The ANMP also wants lower VAT on public lighting and school meals. The Municipal Emergency Fund (FEM) currently covers 60% of eligible costs for storm-damaged equipment and territories, leaving the remaining 40% to municipalities, and the association wants full coverage.
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The bill moves into the specialty phase, where the PS has said it will table proposals on family support and housing while keeping the overall balance unchanged. The IHRU question stays with the prime minister, according to Carneiro. The municipalities have asked for changes to transfers, education funding, VAT and emergency coverage, while the review of the Local Finance Law remains under way.
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Socialist leader José Luís Carneiro defended letting the OE2027 pass, arguing a political crisis would deepen household hardship. Finance minister Joaquim Miranda Sarmento, in a roughly six-hour parliamentary hearing, urged restraint while the PS promised family support measures.
AI text based on reports by PÚBLICO, SAPO, Diário de Notícias and other publishers. Published .